Founded by former senior investors from Citigroup Venture Capital International, Australis Partners recently closed a $379 million debut fund. Australis makes control investments across the Pacific Alliance region in Mexico, Colombia, Peru and Chile. We asked managing partner Enrique Bascur about the opportunities Latin America offers private equity investors and how Australis plans to capitalize on them.
Why is now a good time to invest in Latin America? The downturn in the commodity cycle has lowered GDP growth expectations in many countries in Latin America. This, in turn, is resulting in more attractive and reasonable valuations. However, in the medium and long term, the fundamentals, particularly for the Pacific Alliance countries, remain very attractive. The economies of Mexico, Chile, Colombia, and Peru continue to have low inflation, solid real GDP growth, and low debt/GDP, underpinned by prudent monetary and fiscal policies. These economies also continue to benefit from favorable demographics with young working-age populations, the development of capital markets, greater access to credit, and a growing middle class. Therefore, while some sectors such as commodities face headwinds, sectors that are tied to domestic consumption continue to thrive.