Private Equity and Venture Capital in Brazil: An Analysis of its Evolution (Private Equity e Venture Capital no Brasil: Uma Análise de sua Evolução)

This article focuses on themain idiosyncrasies of Private Equity and Venture Capital (PEVC) in Brazil and its evolution from 2004 to 2009. The main idiosyncrasies are the participation of limited partners in the investment process, absence of leveraged buyouts, shared control of the portfolio companies and use of special rights to compensate for the lack of full control. The main changes observed recently are the increase of private equity investments vis-à-vis venture capital, in the efficiency of managers in the screening of proposals, in the use of special rights to compensate for the lack of control of the portfolio companies, in the use of arbitration panels for conflict resolution, and in the participation of limited partners in the investment process.