Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
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Capital. "Private-equity funds are also a perfect fit for Latin America's retailers facing highly costly and limited long-term financing alternatives." Latin America was not exactly foreign territory for these private equity funds. There was a round of capital-raising and investments in the mid-1990s, but that went sour because of a lack of understanding of the opportunities and risks and because the market was not yet mature, according to Ambrose. Moreover, the devaluation of currencies in Argentina and Brazil drove foreign investors out in 2001 and 2002. "The region started to see these funds again in 2006," she said. "Fund-raising for private equity has increased every year since 2006, with the exception of 2009, because of the global downturn. That first generation of funds left important lessons to the industry. There is a much greater maturity in fund managers investing today. Private equity by definition is a long-term investment, and firms looking at Latin America today are those thinking about it as an important market many years down the road." But there is a shortage of experienced managers to work with these firms, observers say. The industry also faces a prevalent skepticism among some Latin American small and midsize businesses, particularly those that are family-owned, a private capital jolt for caffeine with regard to taking on an equity partner, which they say limits opportunities. "There is still important work to be done," said Ambrose. "Some countries, like Brazil, have a complex tax- regulatory environment. But there is a commitment from Latin America's political leaders in improving [regulations], since they want to attract those investments." SCT Wealth of experience Aureos Capital has provided cap- biggest private equity firm in with company-owned stores. It ital to Iasacorp International — growth goes well beyond fresh the Middle East, bought Aureos signed up El Salvador's Grupo and lots more besides. Iasacorp, capital," said Alejandro Gómez, Capital in February 2012.) Simàn, one of Central America's owned by the Benavides family Iasacorp's manager of adminis- of Peru, had 100 stores in 2009 tration and finances. "They do DoIt, DoIt Kids and fashion- and was looking to grow. Aureos' not seek control of the compa- accessories chain Glitter, which Latin America Fund bought a nies they invest in, but contrib- serves middle-class women. 40 percent last year, with same- 27 percent stake for $4 million, ute to the financial rationality, Iasacorp also holds the franchise store sales up 15 percent," and today Iasacorp owns 426 networking [and] corporate gov- rights in Chile and Peru for girls' said Gómez. "We expect to end stores projected to generate a ernance, and in having an objec- apparel-and-accessories chain 2013 with 530 stores and a 35 combined $100 million in sales tive vision within a family-owned Funky Fish. Iasacorp says it percent sales growth." this year. company." (Abraaj Capital, the plans to enter Mexico this year 238 SC T / M a y 2 0 1 3 "Aureos' contribution to our Iasacorp owns jewelry chain largest retailing groups, as its franchiser there. "Our overall sales went up — MBP