Private Equity and Venture Capital IndustryPerformance in Brazil: 1990–2013

This article investigates the performance of Brazilian private equity (PE) and venture capital funds between 1990 and 2013. The Spectra-Insper database is used for information about gross returns and multiples. Investment amounts are collected from what General Partners report in Private Placement Memorandum or that are hand collected by the CVM (Brazilian Security Exchange Commission) or other commercial sources. The performance of 46 funds is analyzed. The average IRR of Brazilian funds is higher than the average of U.S. funds over the same period. We observe that Brazilian funds with vintage years between 1990 and 1997 underperform U.S. PE funds on average, but those with vintage years between 1998 and 2008 outperform U.S. PE funds. This pattern may reflect a learning curve in Brazilian PE industry. We find evidence that performance in Brazil has a higher cyclicality than in the U.S., but this may be due to the small sample size rather than the emerging market effect.