Last week, Robin bounced me this article excellent article in Venturebeat on Brazil's private equity potential. I fully second the article, Brazil has extremely strong fundaments to grow in the PE space (just look at the tiny fraction of PE/GDP today, which is comparable to the small fraction real estate financing/GDP); plenty of room tro grow.
Many people make the remark that the favorable global conditions of Brazil (higher commodity prices) might come to an end. Morgan Stanlye's Marcelo Carvalho recently voiced in his various notes that Brazil, although better shielded than before, is far from immune from global financial headwinds. I agree with him, Brazil is not for beginners. Now that we are heading for the real economical effects of this financial crisis, things may indeed turn for the worse. However, remember the fundamentes, the global economu is now in a positioin where it needs Brazil with an external deficit much more than it needs a Brazil with a pegging exchange rate amassing and investing reserves.
And the fundaments of Brazil are extremely strong, the mobile services market in Brazil is growing faster than the growth of mobile services in China. And in his post of today, Pablo Bertorello points out that online shopping in Latin America is bigger, at US$ 4 billion, and growing faster than China's. Let's indeed not forget the figures: the good old US represented 20% of global production in 2000, today this dropped to 14,3%.
When I focused in 2003 on Brazil, I didn't see it as an ugly duckling like most did at that time. Which doesn't mean I dismiss the voices of caution; yet I remain positive on behalf of Brazil. Brazil has a huge challenge to submit to the rules of the global economy where money goes for top line yield; but that's the way it has to be and I think Brazil might be better prepared for it than most think.
Which brings me to tyhe top conclusion on Brazil: local talent and entrepeneurship will make or break the country; the country needs no less to make its momentum .
