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US private equity firm injects major confidence in Brazil
01/10/2010
US private equity firm Blackstone has joined the rush to invest in Brazil by spending US$200 million on a 40 per cent stake in Brazilian private equity firm, Patria Investimentos.
The company has joined the ranks of major investment firms from China and India in getting excited about Brazil's stable growth and a growing middle class. Gaining a presence in the South American nation, widely seen as the world's most promising emerging market, is now viewed by many as an absolute necessity.
Blackstone will pay for the stake partly with shares of Blackstone and partly with cash. Reports say it will require Patria to invest part of the money in funds currently managed by the Brazilian company.
Blackstone's CEO Stephen A. Schwarzman said this week, "In 10-15 years [emerging markets] will be almost half of the world’s economy. The idea of not participating in half of the world’s economy in a robust way seems like sort of deficient corporate strategy from my point of view, and frankly an illogical strategy."
Blackstone's technique in entering Brazil differs, however, from that taken by Chinese and Indian companies. Blackstone has chosen that partnership is the more viable option rather, like the firms from China and India, than setting up its own subsidiaries. It is understood that a route has been left open for Blackstone to take over Pátria, and for it to "become part of the Blackstone family".
The company has joined the ranks of major investment firms from China and India in getting excited about Brazil's stable growth and a growing middle class. Gaining a presence in the South American nation, widely seen as the world's most promising emerging market, is now viewed by many as an absolute necessity.
Blackstone will pay for the stake partly with shares of Blackstone and partly with cash. Reports say it will require Patria to invest part of the money in funds currently managed by the Brazilian company.
Blackstone's CEO Stephen A. Schwarzman said this week, "In 10-15 years [emerging markets] will be almost half of the world’s economy. The idea of not participating in half of the world’s economy in a robust way seems like sort of deficient corporate strategy from my point of view, and frankly an illogical strategy."
Blackstone's technique in entering Brazil differs, however, from that taken by Chinese and Indian companies. Blackstone has chosen that partnership is the more viable option rather, like the firms from China and India, than setting up its own subsidiaries. It is understood that a route has been left open for Blackstone to take over Pátria, and for it to "become part of the Blackstone family".
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