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Industry Research Report on the Private Equity in Argentina.

Value Chain outline

The Private Equity (PE) industry value chain in Argentina, mirroring global structures but adapted to the local market's characteristics, typically comprises the following key steps: Fundraising, Deal Sourcing & Selection, Due Diligence, Investment & Value Creation (Portfolio Management), and Exit. Each step involves distinct activities, participants, and challenges within the Argentine context.

Identification and description of each step in the value chain

Fundraising

This is the initial stage where private equity firms (General Partners or GPs) raise capital from investors (Limited Partners or LPs) to create funds. In Argentina, PE funds have traditionally raised capital outside the country, though some local fundraising occurs.

  • Identification and description of segments:
    • Limited Partners (LPs): These are the investors who commit capital to PE funds. In the Argentine context, while most funding for PE funds operating in the country comes from foreign investors, local family offices, high net-worth individuals, and some local investment companies also act as LPs. Local banks, insurance companies, and government agencies do not typically invest in PE in Argentina. Latin American LPs are becoming more sophisticated.
    • General Partners (GPs): These are the private equity firms that manage the funds and make investment decisions. They structure the funds, typically as offshore limited partnerships for tax efficiency.
  • List of types of players in each segment:
    • LPs: Foreign institutional investors, local family offices, high net-worth individuals, local investment companies.
    • GPs: Private Equity firms (e.g., Southern Cross Group, ConoSur Capital, Grupo Pegasus, Inverlat, Clara Capital, The Exxel Group), Venture Capital firms (e.g., Alaya Capital, DC Ventures, Draper Cygnus, Kaszek, NXTP Ventures).
    • Intermediaries: Placement agents.
  • Detailed description of the main activities within each segment:
    • For GPs: Developing investment strategies, structuring funds (often offshore), marketing funds to potential LPs, securing capital commitments, managing investor relations, and complying with reporting requirements (though Argentina lacks specific PE regulation, general corporate rules apply).
    • For LPs: Evaluating fund managers and investment strategies, committing capital to selected funds, monitoring fund performance, and receiving distributions.
  • List examples of key players with detailed profiles:
    • See "Examples of Main Players" section below for profiles of selected firms active in Argentina.

Deal Sourcing & Selection

In this phase, PE firms identify potential target companies for investment that fit their investment strategy and criteria.

  • Identification and description of segments:
    • Target Companies: Private companies, divisions of larger corporations, or startups seeking capital for growth, buyouts, or restructuring. These can span various sectors.
    • Intermediaries: Professionals and firms that facilitate deal flow by identifying potential targets, connecting buyers and sellers, and providing initial assessments.
  • List of types of players in each segment:
    • PE/VC Firms: Internal deal sourcing teams.
    • Target Companies: Businesses across various industries in Argentina.
    • Intermediaries/Advisors: Investment banks (Alantra), M&A advisory firms (Fenix Partners, ONEtoONE Argentina, Oaklins Argentina), law firms (Marval O'Farrell Mairal, PAGBAM Abogados, Kier Joffe), business consultants.
  • Detailed description of the main activities within each segment:
    • For PE/VC Firms: Market research to identify attractive sectors and companies, networking with intermediaries and business owners, evaluating initial investment proposals, and conducting preliminary screening of opportunities.
    • For Intermediaries/Advisors: Identifying potential M&A targets, preparing confidential information memoranda (CIMs), approaching potential investors/buyers, and facilitating initial discussions.
  • List examples of key players with detailed profiles:
    • Fenix Partners: Independent corporate finance advisory firm based in Buenos Aires, specializing in mid-market transactions, advising PE funds, corporate clients, and family offices. Expertise in sectors like Oil & Gas, Software, Energy, Agribusiness, Financial Services, Retail, etc. Offers M&A advisory, capital raisings, valuations, and debt restructurings.
    • Alantra: Investment banking firm in Buenos Aires offering M&A advisory services to listed and private companies, PE, and institutional investors across South America, focusing on mid-market transactions.
    • ONEtoONE Argentina: M&A Advisory Firm with global reach, advising PE firms, multinationals, and business owners on buy side and sell side M&A, capital raising, valuation, and strategic advisory.
    • Law Firms: Several law firms in Argentina have strong Corporate/M&A practices that advise on PE and VC deals, including Marval O'Farrell Mairal, PAGBAM Abogados, Kier Joffe, and others.

Due Diligence

Once a potential target is identified, PE firms conduct extensive due diligence to thoroughly assess the company's financial health, legal standing, operational efficiency, market position, and potential risks.

  • Identification and description of segments:
    • Financial Due Diligence: Examining financial statements, cash flow, profitability, and financial projections.
    • Legal Due Diligence: Reviewing contracts, corporate structure, compliance, litigation, and regulatory matters.
    • Commercial & Operational Due Diligence: Analyzing market dynamics, competitive landscape, management team, operations, and potential for operational improvements.
    • Technology Due Diligence: Assessing the target's technology platforms, products, IT infrastructure, and development capabilities, increasingly important in the digital era.
  • List of types of players in each segment:
    • PE/VC Firms: Internal teams.
    • Accounting Firms: Providing financial and commercial due diligence services.
    • Law Firms: Conducting legal due diligence.
    • Specialized Consultants: Offering specific expertise (e.g., technology, environmental, market research).
  • Detailed description of the main activities within each segment:
    • For PE/VC Firms: Coordinating the due diligence process, reviewing reports from advisors, identifying key risks and opportunities, and validating investment assumptions.
    • For Advisors: Conducting detailed investigations in their area of expertise, identifying red flags, quantifying risks and opportunities, and preparing comprehensive reports for the PE firm. Main hurdles in Argentina include challenging due diligence processes due to poor record-keeping or complex regulatory environments.
  • List examples of key players with detailed profiles:
    • Grant Thornton Argentina: Provides financial and commercial due diligence services as part of their private capital solutions.
    • Endava: Offers product and technology due diligence services for private equity firms, providing actionable insights on technical capabilities.
    • Law Firms: Numerous firms are involved in the legal aspects of due diligence (see Deal Sourcing section).

Investment & Value Creation (Portfolio Management)

Upon successful due diligence and negotiation, the PE firm invests in the target company. The focus then shifts to actively managing the portfolio company to enhance its value over the holding period.

  • Identification and description of segments:
    • Investment Strategies:
      • Buyouts: Acquiring a controlling stake in a company, often using leverage, with the aim of making significant operational and strategic changes.
      • Growth Equity: Investing in minority stakes in mature, high-growth companies to fund expansion initiatives.
      • Venture Capital: Providing early-stage funding to startups with high growth potential, often in technology-enabled sectors.
    • Value Creation Activities: Operational improvements, strategic repositioning, add-on acquisitions, management team strengthening, and financial restructuring.
  • List of types of players in each segment:
    • PE/VC Firms: Fund managers and investment professionals responsible for portfolio oversight and value creation initiatives.
    • Portfolio Company Management Teams: Working closely with PE investors to implement strategies.
    • Consultants: Providing expertise in specific areas like strategy, operations, or technology.
  • Detailed description of the main activities within each segment:
    • For PE/VC Firms: Structuring the investment deal, providing capital and potentially debt financing, appointing board members, developing and executing value creation plans, monitoring performance against key metrics, and supporting management teams. ConoSur Capital, for instance, focuses on value creation through operational improvements and hands-on management. Victoria Capital Partners targets control, joint-control, and significant minority positions with active board participation and value-creation involvement.
    • For Management Teams: Implementing strategic and operational changes, managing day-to-day business, and reporting to the PE investors.
  • List examples of key players with detailed profiles:
    • See "Examples of Main Players" section below for profiles of selected firms active in Argentina with different investment strategies.

Exit

The final stage of the PE value chain is the exit, where the PE firm sells its stake in the portfolio company to realize a return on its investment for its LPs. The typical holding period is 5-7 years, sometimes up to 10.

  • Identification and description of segments:
    • Trade Sale: Selling the company to a strategic buyer (another company in the same or a related industry). This is the most typical exit strategy in Argentina due to the underdeveloped capital market.
    • Secondary Buyout: Selling the company to another private equity firm.
    • Initial Public Offering (IPO): Listing the company's shares on a stock exchange. Less common in Argentina due to the underdeveloped capital market.
    • Management Buyout (MBO): Selling the company to its existing management team.
    • Partial Exit: Selling a portion of the stake while retaining some ownership.
  • List of types of players in each segment:
    • PE/VC Firms: The selling investor.
    • Buyers: Strategic corporations, other PE firms, management teams, public investors (in the case of an IPO).
    • Advisors: Investment banks, law firms, accounting firms assisting with the transaction process.
  • Detailed description of the main activities within each segment:
    • For PE/VC Firms: Preparing the company for sale (e.g., optimizing financials, strengthening management), selecting the appropriate exit route, engaging advisors, negotiating terms with potential buyers, and completing the transaction.
    • For Advisors: Identifying potential buyers, conducting valuation analysis, managing the sale process (e.g., auctions), drafting and negotiating sale agreements, and handling regulatory requirements.
  • List examples of key players with detailed profiles:
    • Firms mentioned in Deal Sourcing & Selection as M&A advisors and law firms are typically involved in the exit process as well. An example of a PE exit involving Argentina was the sale of Coats Group plc's business in Brazil and Argentina to an entity backed by a Sao Paulo Private Equity Firm in 2022.

Show estimates of volumes and sizes of each step in the value chain.

Specific volume and size estimates for each distinct step of the private equity value chain in Argentina are not readily available in the provided sources. The data tends to focus on overall market size, funding inflow, and deal counts.

However, we can infer some volume/size indicators related to specific stages or the market as a whole:

  • Overall Market / Investment Activity:
    • Argentina Venture Capital Market Size (2024): USD 2600.15 million or USD 3958.51 million.
    • Argentina VC Funding Inflow (2024): $418 million or $415 million. This represents a significant increase compared to 2023 levels ($67 million). Argentina was one of the few countries in Latin America to see an increase in VC investment in 2024.
    • Latin America VC Funding (2024): $3.6 billion across 694 deals.
    • Argentina M&A Deals (Year-to-date 3Q24): 150 deals worth a combined USD 2.5 billion.
    • Argentina M&A Deals (1Q24): 33 deals worth a combined USD 223 million.
    • Latin America M&A Deal making fell 11% by volume and 30% by aggregate value in 1Q25 compared to the same period in the previous year.
  • Fundraising: While specific figures for capital raised for Argentina-focused funds in 2024-2025 are not available, global PE fundraising in H1 2024 was $408.6 billion across 861 final closes. However, fundraising has been challenging globally. Argentina-focused funds often raise capital from foreign investors.
  • Investment: The value of investments reflects the overall funding inflow. VC investment in Argentina in 2024 was approximately $415-$418 million. Deal counts contribute to volume; Latin America saw 694 VC deals in 2024, with early-stage deals dominating. Specific PE deal volume and value for Argentina beyond the general M&A data is not provided.
  • Exit: Information on the volume and size of exits in Argentina is limited, though trade sales are noted as the most common method. The overall tough exit environment globally and in Latin America impacts liquidity.

Value Chain Summary Table

Aspect Fundraising Deal Sourcing & Selection Due Diligence Investment & Value Creation Exit
Main Activities Raising capital from LPs to form funds. Identifying and evaluating potential investment opportunities. In-depth investigation of target company (financial, legal, operational, etc.). Investing capital, implementing improvements, and managing portfolio companies to increase value. Selling the investment to realize returns.
Segments Limited Partners (LPs), General Partners (GPs). Target Companies, Intermediaries (Advisors). Financial, Legal, Commercial/Operational, Technology. Buyouts, Growth Equity, Venture Capital; Operational/Strategic improvements, Add-on acquisitions, Restructuring. Trade Sale, Secondary Buyout, IPO, MBO, Partial Exit.
Types of Players Foreign investors, Local Family Offices, HNWIs, Investment Companies (LPs); PE/VC Firms (GPs); Placement Agents. PE/VC Firms; Private Companies, Divisions, Startups (Targets); Investment Banks, M&A Advisors, Law Firms, Consultants (Intermediaries). PE/VC Firms; Accounting Firms, Law Firms, Specialized Consultants. PE Firms, VC Firms; Portfolio Company Management; Consultants. Strategic Buyers, Other PE Firms, Management Teams, Public Investors; Investment Banks, Law Firms, Accounting Firms.
Argentina Context Significant foreign funding; local HNWIs/Family Offices; lack of specific regulation; offshore fund structures common. Mid-market focus by some firms; various sectors targeted; M&A advisors and law firms active. Hurdles include poor record-keeping, complex regulations; various professional services firms provide support. Includes Buyout, Growth Equity, and VC strategies; focus on operational improvements; local investors identifying mid-market opportunities. Trade sale is most common; IPOs less frequent due to underdeveloped capital market.
Volumes/Sizes (See section below - data is aggregate market/funding). (Reflected in deal count and value - see section below). (No specific volume data per segment available). Argentina VC Funding 2024: ~$415-418M; Latin America VC Deals 2024: 694. (Reflected in exit transaction values - limited specific data available).

Examples of Main Players

Based on the provided sources, here are examples of key players active in the Private Equity and Venture Capital industry in Argentina, with available profile details:

  • Southern Cross Group: An investment firm founded in 1998, headquartered in Argentina. Focuses on consumer goods, oil and gas, healthcare, retail, transport, and tech-related companies across Latin America. Noted for raising a large fund ($1.7 billion) in 2010 focused on Latin America.
  • ConoSur Capital: A private equity firm founded in 2011, focusing on opportunistic acquisitions of quality mid-size companies primarily in Argentina and Uruguay. Seeks controlling or significant minority equity positions and aims for value creation through operational improvements and hands-on management. Has significant experience across various sectors including agribusiness, retail, financial services, transportation & logistics, energy, consumer goods, and real estate. The founding partners, José Manuel Ortiz Masllorens and Ramón Agote, have over 50 years of combined experience.
  • Grupo Pegasus: A private equity fund with a notable presence in Argentina. Founded in 2000. Had a portfolio count of 11 companies as of January 2025.
  • NXTP Ventures: Described as the most prominent venture capital firm operating in Argentina. Provides Seed and Series A funding to companies in specific sectors: B2B Cloud & SaaS, E-commerce Enablers, Fintech, B2B Marketplaces, AI, and Data-Driven Businesses. Investment size ranges from $500k to $3M for Seed and $2M to $5M for Series A. Has invested in over 130 companies.
  • Kaszek: A prominent venture capital firm in Latin America with a presence in Buenos Aires. Offers Seed to Series A+ funding. Primary investment sectors include Fintech, Edtech, Healthtech, Ecommerce, Marketplaces, Enterprise Software, and SaaS. Has made 76 investments across Latin America.
  • Victoria Capital Partners: An independent private equity firm active in Argentina, Colombia, Chile, and Peru. Managed by experienced professionals who have been investing in the region since 1995. Targets control, joint-control, and significant minority positions with active board participation and value creation involvement. Has overseen the deployment of $1.5 billion across 18 South American portfolio companies since 2007.
  • Clara Capital: A private equity fund based in Argentina. Founded in 2012. Had a portfolio count of 3 companies as of January 2025.
  • Inverlat: A private equity fund operating in Argentina. Founded in 2011. Had a portfolio count of 5 companies as of January 2025.
  • The Exxel Group: A private equity fund with a history in Argentina. Founded in 1991. Had a portfolio count of 3 companies as of January 2025.
  • L Catterton: A global private equity firm with investment activity that includes Argentina. Invests in sectors such as Consumer Goods and Food and Agriculture. As of January 2025, has a portfolio count of 293 companies globally.

Case studies for specific deals by these firms in Argentina are not detailed in the provided general overviews, but their investment strategies and sector focus provide insight into their activities. For example, ConoSur Capital focuses on opportunistic acquisitions of mid-size companies and value creation through operational improvements, while NXTP Ventures and Kaszek focus on early-stage tech startups.

Volumes and Sizes

Estimates of volumes and sizes for the Private Equity and Venture Capital industry in Argentina for 2024-2025, based on the available

  • Venture Capital Market Size (2024):
    • USD 2600.15 million
    • USD 3958.51 million
  • Venture Capital Funding Inflow (2024):
    • $418 million
    • $415 million
    • This represents a significant increase from the $67 million in VC investment in Argentina in 2023.
    • Argentina's VC funding increase in 2024 was a standout compared to many other emerging economies.
    • Most reported VC rounds in Argentina in 2024 were below $10 million and primarily seed-stage.
  • M&A Deal Volume and Value in Argentina:
    • Year-to-date 3Q24: 150 deals worth a combined USD 2.5 billion.
    • 1Q24: 33 deals worth a combined USD 223 million.
    • Inbound M&A deal making in 1Q24 was led by US-based companies.
    • The M&A market in Argentina is described as modest but has seen an pickup since late 2023/early 2024.
  • Fund Size / Capital Deployment (Examples):
    • Advent International: Raised approximately $8 billion for deployment in Latin America (region-wide).
    • Southern Cross Group: Raised a $1.7 billion fund in 2010 (Latin America focus).
    • Linzor Capital Partners: Invested close to $1.2 billion in 25 deals across Latin America since 2006.
    • Victoria Capital Partners: Overseen deployment of $1.5 billion across 18 South American portfolio companies since 2007.
    • TRG Argentina Private Equity Fund: Noted as inactive with Assets Under Management (AUM) of $93.38 million.
  • Deal Count (Examples by firm):
    • NXTP Ventures: 130+ investments.
    • Kaszek: 76 investments across Latin America.
    • Alaya Capital: 34 investments.
    • Draper Cygnus: 29 investments.
    • L Catterton: 293 companies globally in portfolio (as of Jan 2025).
    • Grupo Pegasus: 11 companies in portfolio (as of Jan 2025).
    • Inverlat: 5 companies in portfolio (as of Jan 2025).
    • Clara Capital: 3 companies in portfolio (as of Jan 2025).
    • The Exxel Group: 3 companies in portfolio (as of Jan 2025).

Market share estimates for individual firms within Argentina are not available in the provided sources. The data focuses on overall market activity and the number of deals or portfolio companies for specific firms, often on a regional basis.

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