Doing business in Latin America has always involved a certain level of adrenaline. Historically, the region’s biggest challenge has been economic volatility. In the late 1980s and early 1990s, many countries faced huge fiscal deficits, hyperinflation, and highly closed economies. Brazil, in particular, went through a significant transition in the late 1990s and early 2000s, with deregulation, the opening of the economy, greater fiscal discipline, and inflation under control. That period marked the beginning of meaningful opportunities for the banking and investment industry.
Since then, Latin America has lived with uncertainty and volatility, but at the same time has fostered strong entrepreneurship and a growing number of opportunities. Today, Brazil continues to show momentum despite persistent challenges. It is a country with a high basic interest rate, currently around 15%, and this is expected to remain the case in the coming months. Even so, Brazil remains a market full of growth opportunities and consolidation across many industries.
Financial sponsors are very active in the region, as is foreign capital. In capital markets, foreign investors currently represent around 60% of investments, while M&A activity continues at a strong pace. This year alone, Brazil is likely to see approximately 1,400 announced transactions, including large deals in sectors such as logistics, mining, and infrastructure. While technology represents roughly 15% of M&A activity, opportunities are spread across virtually all sectors of the economy.
By Alexandre Pierantoni, Managing Director, Head of Brazil and LatAm Investment Banking, Kroll
Alexandre.Pierantoni@kroll.com
