Determinantes do Sucesso dos Investimentos de Private Equity e Venture Capital no Brasil

Abstract

This paper investigates the determinants of performance of the investments of private equity and venture capital (PEVC) funds in Brazil. We use two unique databases: the First Brazilian Private Equity and Venture Capital Census and the Guia-GVcepe Endeavor, with information on this industry for the period 1999 to 2007. As measures of performance we use the percentage and number of exits through IPO, acquisition by a company or by another investor. Our results indicate that the factors influencing the performance of investments are: size of the fund, number of investments, the practice of co-investment, experience and foreign origin of the managing organization, focus on late stage, intensity of contact between managers and portfolio companies and the number of seats on the boards of the invested companies. The number of successes grows with the number of investments at a declining rate. This can indicate 1) a limit to the ability of managers or 2) that a large number of investments allows for greater diversification of risk, directing investments to companies of high risk but with a high upside.

Research on the Influence of Investor Experience and Investment Strategy on Investment Return

“…In terms of research on the relationship between investor experience and investment returns of venture capital funds. Siqueira and Carvalho (2011) [6] studied the influencing factors of the investment return of venture capital funds, and believed that the investment return of venture capital funds depends on the fund size, investment experience, etc., and believed that investment experience and investment return are positively correlated. Zarutskie (2010) [7] examined the relationship between the human capital of the management team of venture capital funds and the return on investment, and found that the richer the investment or entrepreneurial experience of the management team, the greater the proportion of successful exits in the portfolio.…”

The Impact of Private Equity and Venture Capital Funds on post-IPO Operational and Financial Performance in Brazilian invested companies

“…In Brazil, Siqueira, Carvalho and Netto (2011) investigate the determinants of the success of PE/VC investments, using data from the period from 1999 to 2007. The authors emphasize that the factors influencing the performance of investment vehicles are: volume of capital committed, number of investments made, existence of co-investments, foreign origin and experience of the management organization, focus on private equity firms, intensity of contact between managers and portfolio companies and the number of seats on boards of directors of companies invested by fund manager.…”

Private Equity and Venture Capital Industry Performance in Brazil:1990–2013

“…Information about fund performance provided by GPs, if it exists, may have reporting bias. Siqueira et al [2011] investigated the determinants of fund performance at the deal level using census information, but in the absence of return information, they use exits through IPO or trade sale as a proxy for success.…”