Gustavo Ballvé on March 29th, 2011
Corporate Strategy, Diversified financials, Food for thought, Home, Industries, Investment Themes, Portfolio Management, Risk management, Signal or Noise

Nice note yesterday on NYT’s Dealbook.com regarding some differences between Brazilian and US buyout firms/ practices. The most relevant, of course, is leverage (the lack of it in Brazil). The optimism surrounding Brazil has made some of these firms’ jobs more difficult, and as they highlight, there’s bound to be more competition – from local and foreign firms – as the cost of leverage decreases… Most importantly, as Arminio Fraga of Gavea highlights: ” ‘There will be more leverage, for sure,’ Mr. Fraga said. ‘Hopefully, we won’t do anything too stupid when the opportunity becomes real.’ “ The really difficult part is remaining in the sidelines when prices are not attractive, and when there’s a mandate to invest it can be hard to be truly disciplined about it.

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