Bradesco Asset brought American private equity manager Riverwood Capital, with around US$6 billion under management, to Brazil through a feeder fund from the Riverwood Capital Partners Latam II fund, the second fund focused on companies in Latin America.
Riverwood’s strategy is to invest in medium-sized technology companies with high growth potential, in various regions of the world. Examples of companies already invested in are RD Station, Gupy and Vtex. This is the fourth fund from the private equity manager founded in 2008, by Francisco Alvarez-Demalde and Jeffrey Parks (formerly of KKR).
The global strategy has surpassed its target fundraising of US$ 1.5 billion and reached US$ 1.8 billion. The fund intends to invest in between 20 and 30 companies, of which between 10 and 15 will be in Latin America.
“Riverwood strongly believes in the potential of Latin America for technology companies and, therefore, has relevant exposure in the region”, says Luiz Eugênio Figueiredo, alternative investment manager at Bradesco Asset, in an interview with NeoFeed.
According to him, this is a unique moment for investment in companies in Latin America, due to the high interest rates and low valuation of companies. “And we are taking this opportunity to our large, sophisticated investors”, says Figueiredo.
Expanding the offer of alternatives
Bradesco’s investment solutions area currently has R$70 billion under management and has 192 partnership managers, in addition to Bradesco Asset funds.
The distribution of the American private equity fund is another step for Bradesco in offering alternative products, which began in 2020 and, last year, began in private equity and venture capital with the launch of the Explorer fund of funds (FoF), which raised R$250 million and invested in 21 managers focusing on Brazil and Latin America.
Now, FoF is looking for fund shares in the secondary market and in co-investments with other managers to provide more returns to its investors.
“We opened our platform to third parties in 2015 and, since then, we have been putting together a complete grid for our customers. We started by offering international funds and now we are focusing on alternative funds”, says Adilson Ferrarezi, head of investment solutions at Bradesco Asset.
Before Bradesco, the only large bank that offered a range of investment in private equity and venture capital was Itaú, whose Fund of Funds has had an area focused on alternative investment since 2017. Last year, Santander Private made its first emission in the segment. Now, there is a growth trend in this offer – and Bradesco does not want to be left behind.
Other releases from feeder monomanager are on the radar. But Bradesco’s big bet is on the launch at the beginning of next year of a global private equity and venture capital fund of funds and a global fund of funds in hedge funds. The idea is to give access to recognized names in infrastructure, forestry and venture capital in Brazil and abroad.
“We are putting together an investment program in alternatives, so that it is no longer an allocation on demand from a specific client, but something structured to be in the portfolio. Whether via FoF or access to funds recognized in the market, the objective is to actively seek the best opportunities curated by Bradesco over time, says Ferrarezi.
According to him, Brazil is at a stage in the economic cycle that is conducive to starting or expanding a program in alternative investments due to the drop in interest rates in Brazil and higher rates in the main countries abroad. And also due to the attractive prices that companies find themselves given the high discount rate and the need for cash on the part of private companies to overcome this tide of the current cycle.
Furthermore, this is a class in which Brazilian investors are very under-allocated. “We want our clients to have between 5% and 15% of their portfolio in it, depending on the size of their assets and their risk appetite”, says Ferrarezi.