Private Equity and Venture Capital in an Emerging Economy: Evidence from Brazil
14 Pages Posted: 21 Jul 2006
Date Written: June 2006
This article, based on the Brazilian experience, examines how Private Equity and Venture Capital (PE/VC) adapts to an emerging economy. Our dataset is based on two extensive questionnaires answered by each of the 65 PE/VC organizations with offices in Brazil. The results reveal that a lack of infrastructure and security create investment opportunities. However, institutional idiosyncrasies represent a major barrier and force PE/VC - a U.S. investment model - to adapt by investing in different stages of business development, avoiding LBOs, taking a generalist industry approach, geographically concentrating in the financial cluster and relying on arbitration for dispute resolution.
Keywords: venture capital, private equity, institutional economics
JEL Classification: G24, N26, O16, D23
Suggested Citation: Suggested Citation