IDEAS home Printed from https://ideas.repec.org/a/taf/veecee/v10y2007i2p111-126.html

Private equity and venture capital in an emerging economy: evidence from Brazil

Author

Listed:
  • Leonardo de Lima Ribeiro
  • Antonio Gledson de Carvalho

Abstract

The Private Equity and Venture Capital (PE/VC) financial model was initially developed in the US and, therefore, designed for the US institutional environment. The degree to which the US PE/VC model can perform in other institutional environments is an interesting question. This article is based on data supplied by all of the 65 PE/VC organizations with offices in Brazil in 2004. Comparing Brazil and the US, we found that the main similarities are: an industry composed mostly of independent organizations, managing capital coming mostly from institutional investors; capital is heavily concentrated regionally and in few organizations; investments are made within a close geographical distance; and software and IT are preferred sectors. The main differences are that for Brazil: investments are concentrated in more advanced stages of corporate development; since credit is scarce, few LBOs take place; low levels of sector specialization (PE/VC investing in a broad variety of industrial sectors); firm concentration in Sao Paulo's financial district suggests a quest for commercial partners and strategic buyers for portfolio companies; and Brazilian PE/VC regulation recognizes the inefficiency of the legal system and forces the use of arbitration. We also discuss possible reasons for these adaptations.

Suggested Citation

  • Leonardo de Lima Ribeiro & Antonio Gledson de Carvalho, 2007. "Private equity and venture capital in an emerging economy: evidence from Brazil," Venture Capital, Taylor & Francis Journals, vol. 10(2), pages 111-126, December.
    • Handle: RePEc:taf:veecee:v:10:y:2007:i:2:p:111-126
    DOI: 10.1080/13691060801946121
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13691060801946121
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13691060801946121?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Cumming, Douglas & Schmidt, Daniel & Walz, Uwe, 2004. "Legality and venture governance around the world," CFS Working Paper Series 2004/17, Center for Financial Studies (CFS).
    2. repec:wbk:wbpubs:12426 is not listed on IDEAS
    3. repec:wbk:wbpubs:12425 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cumming, Douglas J., 2005. "Capital structure in venture finance," Journal of Corporate Finance, Elsevier, vol. 11(3), pages 550-585, June.
    2. Cumming, Douglas & Zhang, Yelin, 2016. "Alternative investments in emerging markets: A review and new trends," Emerging Markets Review, Elsevier, vol. 29(C), pages 1-23.
    3. Tereza Tykvová, 2006. "How do investment patterns of independent and captive private equity funds differ? Evidence from Germany," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 20(4), pages 399-418, December.
    4. L. Bottazzi & M. Da Rin & T. Hellmann, 2007. "The Importance of Trust for Investment: Evidence from Venture Capital," Working Papers 612, Dipartimento Scienze Economiche, Universita' di Bologna.
    5. Groh, Alexander P. & Liechtenstein, Heinrich & Canela, Miguel A., 2008. "Limited partners' perceptions of the Central Eastern European venture capital and private equity market," IESE Research Papers D/727, IESE Business School.
    6. Bottazzi, Laura & Da Rin, Marco & Hellmann, Thomas, 2009. "What is the role of legal systems in financial intermediation? Theory and evidence," Journal of Financial Intermediation, Elsevier, vol. 18(4), pages 559-598, October.
    7. Cumming, Douglas & Fleming, Grant & Schwienbacher, Armin, 2006. "Legality and venture capital exits," Journal of Corporate Finance, Elsevier, vol. 12(2), pages 214-245, January.
    8. Douglas Cumming, 2005. "Review Essay: Global Venture Capital Transactions," Venture Capital, Taylor & Francis Journals, vol. 7(2), pages 185-201, January.
    9. Cumming, Douglas & Siegel, Donald S. & Wright, Mike, 2007. "Private equity, leveraged buyouts and governance," Journal of Corporate Finance, Elsevier, vol. 13(4), pages 439-460, September.
    10. Groh, Alexander P., 2009. "Private equity in emerging markets," IESE Research Papers D/779, IESE Business School.
    11. Elsayed Elsiefy, 2014. "Fundamental Requirements for Building an Islamic Venture Capital Model," Accounting and Finance Research, Sciedu Press, vol. 3(1), pages 1-55, February.
    12. Thi X. A. Tran & Thi L. A. Nguyen & Thi H. L. Nguyen, 2016. "Affect of Uncertainty Avoidance on Venture Capital Investing Activities in Asian Countries," Asian Social Science, Canadian Center of Science and Education, vol. 12(12), pages 152-152, December.
    13. Cumming, Douglas & Johan, Sofia Atiqah binti, 2008. "Preplanned exit strategies in venture capital," European Economic Review, Elsevier, vol. 52(7), pages 1209-1241, October.
    14. Cumming, Douglas J., 2005. "Agency costs, institutions, learning, and taxation in venture capital contracting," Journal of Business Venturing, Elsevier, vol. 20(5), pages 573-622, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:veecee:v:10:y:2007:i:2:p:111-126. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/TVEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.