Call Girls Koregaon Park Call Me 7737669865 Budget Friendly No Advance Booking
Private Equity Funds
1. COLOMBIA : AN INVESTMENT OPPORTUNITY FOR
PRIVATE EQUITY FUNDS
Bogotá D.C. 2012
2. OUTLINE
Who We Are
Latin America and Colombia, the world's source of development
Evolution of Private Equity in Latin America and Colombia
Investment opportunities for Private Equity funds in Colombia
Economic Sectors
4. Who We Are
Entity in charge of Promoting International Tourism,
Direct Foreign Investment, and Exports
TOURISM INVESTMENT EXPORTS
5. Proexport supports foreign investors
Information tailored to your needs.
Contacts with the public and private sectors.
Itinerary planning and assistance for travel to Colombia.
Assistance during the installation process and monitoring of
established investors.
All services are free of charge and the information provided during
the process is kept confidential.
www.proexport.com.co
6. Proexport around the world
18 BUSINESS OFFICES
PROEXPORT'S GLOBAL
8 REGIONAL OFFICES
PRESENCE
9 NOVELTIES
Germany
New York
Canada Reino Unido
Russia
United States
Turquey
Mexico
France
Spain
Shanghai
Singapore
Panama Brazil Arab Emirates
Peru
8. Latin America is the second-highest growing region in the
Short-Term (ST) and third-highest in the Long-Term (LT)
(LT): Long-Term: Nominal GDP Variation 2000 - 2010 (ST): Short-Term: Nominal GDP Variation 2009 - 2010
LT ST LT ST
+87% +0% +470% +21%
LT ST LT ST
+51% +5% +112% +16%
LT ST
+126% +20%
LT ST
+148% +20%
Source: EIU
North America Middle East and Sub-Saharan Africa Western Europe
Latin America Asia and Australasia Russian Federation
9. Latin America will continue to increase its nominal GDP, always
ranking higher than Russia, the Middle East and sub-Saharan
Africa.
6000
NOMINAL GDP (US $ Billions)
2000 – 2014*
5000
+126%
4000
3000
2000
1000
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Proy. Proy. Proy. Proy.
2011 2012 2013 2014
LATINAMERICA MIDDLE EAST AND SUB-SAHARAN AFRICA RUSSIAN FEDERATION
Source: EIU
10. Colombia, with higher growth than Latin
America and the world, playing a positive role
in the region's performance.
11. Colombia is the third largest contributor to growth in
Latin America.
Although Argentina represents a larger share of Latin America's GDP, its
23% growth was lower than Colombia's
Countries' contribution to the growth of the GDP in Latin America
(%) Share of the GDP 2000 – 2010
(+126%)
5%
7%
LATINAMERICA 126%
Variation
1%
2000 - 2010
3% BRAZIL 74%
47% +224%
+54% MEXICO 18%
+189% COLOMBIA 10%
+170% CHILE 7%
8% +107% VENEZUELA 6%
5%
+188% PERU 5%
+30% ARGENTINA 4%
+264% ECUADOR 2%
Source: EIU
12. Performance higher than Latin America and the World is
expected over the next few years.
Growth of Colombia's GDP vs. Latin America 2001 - 2010 (%)
08
06
04
02
00
-02
-04
Colombian growth Latinamerican growth World growth
Source: ANDI (National Business Association of Colombia), EIU
13. Colombia, The C in the CIVETS
“The new BRICs are Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa
(CIVETS). They are countries with major populations, dynamic, diverse economies,
political stability and each of them has a brilliant future. Any company with global
ambitions will have to take immediate action in these markets.”
Michael Geoghegan, CEO HSBC
April 26, 2010 in his speech to AmCham Hong Kong
14. Three of the most important rating agencies have granted the
“Investment Grade” to Colombia
The three raters agree on the good economic and
financial performance of the country, highlighting:
Its ability to deal with internal and external shocks
Country's long history of timely debt payments
Increased macroeconomic policy credibility
Security concerns have been waning
31 – May - 2011
15. Economic achievements in 2011
• 1 mill. barrels
• 5.9% Growth • 2 million new per day of oil
Rate in 2011 jobs* and gas
production
1.2% higher than Latin Fourth largest oil
Unemployment rate
American average producer in Latin
(9.3%** 2011)
growth (3.6%) America
• US$62.6 bn in
• US$13.2 bn in
exports G&S • 1.8% GDP
FDI. (4% of
(18.8% of Public Deficit
GDP)
GDP)
Record in Colombian Record in Colombian Non-Financial Public
history history Sector balance
*Three-Month Moving Average August 2010-December 2011.**Three-Month Moving Average unemployment rate December 2011.
16. Colombia among countries with low risk of political
instability
Risk of Political Instability, 2011 7/ Bureaucracy, 2011 8/
Scale 0-10. 0: high – 10: low Scale 0-10. 0: it is an obstacle – 10: it is not an obstacle
Chile 9,4800
Country Rating
Brazil 8,1700
Chile 4.82
Colombia 6,9600
Colombia 3.05
Peru 6,8400
Mexico 2.26
Mexico 5,5900 Peru 1.95
Argentina 4,9700 Brazil 1.62
Venezuel Argentina 1.44
1,0700
a
Venezuela 0.59
Source: IMD World Competitiveness, 2011. Ranking consisting of 59 countries.
7/ The risk of political instability is very low.
8/ Bureaucracy is not an obstacle for business activity.
17. FDI Increase in Non Traditional sectors
FDI in Colombia by Sectors FDI in Colombia by Non Traditional Sectors
2009 - 2011 2009 - 2011
Transport, Construction Agribusiness Agribusiness
Storage and 4% 1% 2%
Communications
5% Construction
10% Commerce,
Manufacturing
6% Transport, Rest., and
Financial Storage and
Oil Communication
Hotels
Services 37%
8% 14% 33%
Commerce,
Rest. & Hotels
12% Manufacturing
18% Financial
Services
Mining 23%
27%
% Share by total FDI of positive flows by origin country, without reinvesting profit and not including the petroleum sector.
Total investment 2009 – 2011: US$ 27,629 million.
Source: Banco de la República.
18. Positioning Colombia as an export platform: 11 free trade agreements
(FTA) with 48 countries allowing preferential access to over 1,500
million consumers
In Force
Signed
In Negotiation
Future
IN FORCE SIGNED IN NEGOTIATION FUTURE
• CAN (Peru, Ecuador y Bolivia) • EFTA (Iceland, Liechtenstein, and • South Korea • Japan
• MERCOSUR (Argentina, Paraguay, Norway • Panama • Australia
Uruguay and Brazil) • European Union (Signature) • Turkey • New Zealand
• Chile • Costa Rica
• G2-Mexico • Dominican Republic
• North Triangle (Honduras, Guatemala • Gulf Community
y El Salvador)
• Switzerland
• EE.UU y Canada
19. Growing young population
With the second largest Spanish speaking population, Colombia concentrates almost
the 80% of its population between 20 and 70 years old
Population Population Pyramid by Sex and Age
(Millions of People) - 2010* Group in 1985 – 2005 - 2020
120 112,5
100
80
60
46,9
40,5
40 34,0
30,0 28,6
17,1
20 14,0
0
Source: Ministerio de la Proteccion Social - EIU
20. Colombian economy: larger than that of Chile, Ireland, Malaysia, Egypt,
Singapore and New Zealand, among others
Nominal GDP
US $ Billions - 2010
289
242 238 229 224 223 218 214 207 203 196
154
140 138 130
104
92
36
Source: EIU (Economist Intelligence Unit)
(10 Oct 20)
21. Colombia's GDP per capita
GDP percapita (constant dollars 2011)
7.000 USD,
10.200 in
PPP
Lower middle income
Source: Raddar. Calculations: Ministry of Finance and Public Credit.
22. According to international standards, Colombia is part of the
group of upper-middle-income countries since 2005
US$ Per-Capita National Income – Atlas Methodology
(Current USD) GDP Per Capita
7000 US$ 9.276
at PPP
6000
Upper Middle Income
5000
4000
3000 Lower Middle Income
2000
1000
Low Income
0
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Source: Ministerio de Hacienda y Crédito Público - EIU
23. Real Consumption by Type of Good
Non Durable Goods US$ Millions
SECTOR 2000 2005
Food, Beverage and Tobacco 19.406 30.941
Medical Expenses 2.272 4.587
Holidays and Amusement 821 1.171
TOTAL 22.498 36.699
63%
TOTAL EXPENSES 2010 US$ 103.693 Millions
Durable Goods US$ Millions
SECTOR 2000 2005
Clothes and Shoes 3.086 4.484
Furniture 3.171 5.176
Equipment and Accessories 1.133 2.412
TOTAL 7.391 12.072
64%
Source: DANE
1US$= 1900 COP$
25. Private Equity Funds Migration towards Emerging
Markets
In 2011, Private Equity Funds (PEF) will present a more
pronounced migration toward Emerging Markets such as Asia,
Middle East , East Europe and Latin America.
Within the current crisis and instability in American and European markets, the opportunity of
investments in Colombia grows in sectors as Infrastructure, Telecommunications and Industry.
26. Private Equity trend towards EM, specifically LATAM
80
70
60 The attractiveness of emerging
50 markets for General Partners
40 investment for this year.
30
20 According to this, Latin America is
10
0
becoming more attractive for
Brazil China Latam (exc India Russia investors than a year ago
Brazil)
Russia
2010 Survey 2011 Survey
India
LP Commitments of investments in
Emerging Markets, related with Latam (exc Brazil)
corporative strategy
China
About 11% of new investors expect
to begin investing in Latin America in Brazil
the next 2 years. -20 0 20 40 60
Source: Emerging Markets Private Equity Survey. EMPEA – Coller Capital
Decrease or Stop Investing Expand Investment Beging Investing
28. Colombia: An improved PE/VC environment
Colombia is the only country in the region showing a
steady improvement in its PE environment
Regional
Country
Ranking
1 Chile
2 Brazil
3 Mexico
4 Colombia
5 Uruguay
6 Trinidad&Tobago
7 Costa Rica
8 Panama
8 Peru
10 Argentina
10 El Salvador
Currently ranked No 4 among Latam countries, an
Source: Lavca 2011 Scorecard
* (1-100 where 100 = best) increase 7 positions since 2008
29. Colombia’s greatest strength when compared to the region is
corporate governance policies
Initiative developed in 1999 in order
to promote competitiveness and
self regulation
“Corporate Governance is concerned with
holding the balance between economic and
social goals and between individual and
communal goals”
Sir Adam Cadbury
Strong Legal Corporate Governance and Development
Colombia Guide
Framework
and Country Code
Law 694 / 05
Sort out corporate
Resolution 271 / 08
issues
Decree 2955 / 10
Main Work Targets: Partnership with Swiss Government ,
Corporate Governance Consulting Bancoldex and PEF to create a
University Support (Research and Formation) corporate governance culture in the
Banking Support (Reducing Company Risk) sector
30. A growing market opportunity for new source of capital
with local pension funds and insurance companies
• Changes in regulation allowed Colombian pension funds and insurance companies to invest in private
equity.
• Since 2011, they entered officially into the new multi-fund system allowing a higher exposure to private
equity. => Moderate fund can invest up to 10% in private equity funds (5% local and 5% foreign)
AUM of Mandatory Pension Funds in Colombia AUM of Mandatory Pension Funds by Multifund
2007 - 2010 (USD MM) 2011 (USD MM)
51.000
feb- 51.513 246
289
11 50.000
209 2.202
2010 52.053
49.000 163 2.257
Higher Risk
2.113 Conservative
2009 42.051 48.000 2.072
Moderate
47.000
2008 30.726
Average Annual 48.191
Growth of 29% in 47.863
46.000 46.917 47.209
4 years
2007 26.905
45.000
0 10.000 20.000 30.000 40.000 50.000 60.000 March April May June
Source: Colombia Financial Superintendence report, december September 2011
31. Insurance companies
Reserves of life and general insurance Some of them are already investing
companies in Colombia (USD MM) in private equity funds such as:
mar- 1.585
11 974
1.523
2010 914
However, there are a total of 22
1.380
2009 854
insurance companies in Colombia
allowed to invest such as:
1.241
2008 796
781
2007 738
0 200 400 600 800 1.000 1.200 1.400 1.600
Life Insurance General Insurance
Source: Colombia Financial Superintendence report, december September 2011
32. Government Programs to promote the development of the
Private Equity and Venture Capital Industry
Bancoldex Capital Program is an initiative designed to
promote PEF/VC industry development in Colombia through
two components
Investment program Non Financial Support
•Bancoldex invests in private
Contribute to improve the
equity and venture capital
PE/VC ecosystem in Colombia.
funds as a Limited Partner.
Apps.co is a government strategy to promotes mobile Internet
demand in Colombia through Apps development. It will count
with an initial investment of US$36 million to conform a Risk
Private Equity Fund for developing local initiatives with technical
apps.co assistance to Colombian Developers, Investors and General
Partners.”
33. An increased in the numbers of PE/VC
In 2011, the number of PEF Closed increased up to 20 with capital commitments of USD 2.131 M
Private Equity Funds in Colombia Closed Funds divided by sector 2011
2005-2011
4
20 686
18 700 8
20
18 600
495
16 500 1
14 12
400 350
12
10 8 300 2
8 147 1
5 200 1 1
1
6
100 40 37 26
4 2 2 8
2 0
0
2005 2006 2007 2008 2009 2010 2011
No. funds closed
Capital Commitments
Source: Bancoldex Capital
34. International players also investing in the country
International General Partners International Limited Partners
Some International Private Equity funds with direct investments in Colombian companies:
2010: investment in Credivalores-Crediservicios, S.A.S. (“Credivalores”), the leading
non-bank provider of consumer loans in Colombia. Investment: US$ 25 Millions
2011: Acquires 3 safety companies to cover local and regional market through Capital
Safety Investment: US$ 55,9 Millions
2011: Acquires Terranum, a Colombian real estate developer
Investment: US$ 75 Millions
36. Ways to invest
Establishing local private equity funds to invest
in the region
Investing and/or Co-investing in Private Equity
Funds established in Colombia
Investing directly in Colombian companies
37. Establishing local private equity funds to invest in the region
Colombia offers an excellent geographic
location that allows to easily access to investment
opportunities y Latin America
According to LAVCA 2011, Colombia´s
strengths when comparing to the region in
terms of it´s PE/VC industry are:
Attractive regulatory framework for the
creation of PE/VC funds
Minority Shareholders protection
Restriction for the local institutional funds
to invest in private equity
Requirenments in terms of Corporate
Government
38. Investing and/or Co-investing in Private Equity Funds
established in Colombia
23 funds in Colombia with USD 2,2 Billion of capital raised
Closed Funds (USD 2.2 billion) Funds in fundraising (USD 467 million)
Inversor 3
Inversor 3
Cine Hispanoamericano 8 Cacao 11
Energético Andino 15
Progresa Capital 22
Forestal Colombia 26 Valor Forestal 11
Valorar Futuro 29
Brilla Colombia 30
Bamboo Finance 10
SEAF FTC 34
Tribeca Natural Resources 40
Tribeca Homecare Fund 40 IVG 30
Escala Capital 44
Nexus Infraestructura I 57
Access SEAF MAS 69 Tagua Capital 30
Fintra - Darby 88
Altra FCP I 106 MCD²F 35
TEKA 104
Kandeo 129
Tribeca Fund I 132 Axon-Amerigo 40
Tribeca Energy Fund 133
Infraestructura Ashmore 170
EPM 50
Aureos 183
Hidrocarburos I, II y III 350
Infraestructura Brookfield 389 Altra II 250
0 200 400
0 100 200 300
38
Source: Estimated data Bancóldex S.A Sept 2012
39. Exposure to multisectorial opportunities through investments
in Colombian companies
Colombia GDP by Sector 2010
Agriculture
8% Mining
and quarrying About 200 Thousand
Social service 10%
activity are Big Companies
20% Industry AROUND 2
0,3% MILLION
COMPANIES
Electricity, IN COLOMBIA
gas and water About 1,8 million
5%
Financial Companies are SME´s.
Services
24%
Construction
9%
48% Industry
Trade, hotels ,
Transportation restaurants
9% 15%
52% Retail
Source:
Source: ACOPI
40. Where, the big ones are starting to grow internationally
US$
Millones
7.000,0
6.503,7
6.000,0
5.000,0 Country Ranking
4.662,0
(2000-2010)
4.000,0
1. USA
3.000,0 3.088,2 2. England
3. Panama
2.000,0 2.254,0 4. Brazil
937,7 5. Peru
1.000,0 6. Guatemala
325,3 912,8 7. Mexico
142,4 8. Chile
0,0
9. Ecuador
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
10. Venezuela
Montage of the first power transmission Acquires the 60% of the Peruvian Electric
system of 500.000 volts in Peru. Company Cálidda.
Investment: US$130 Millions Investment: US$ 111 Millions
Acquires all ING company portfolio in Acquires the 100% of Banco
Chile, México, Peru, Uruguay y Colombia. Centroamericano.
Investment: US$ 3.763 Millions Investment: US$ 1.900 Millions
Source: Banrep -Dinero
41. MILA: Merging of the Chilean, Peruvian and Colombian Stock
Exchange Markets as an exit strategy
MILA will become the biggest stock
exchange market by number of issuers in
Latin America
Total Volume traded H1
2012 - USD $49.52 billion
A total of 550
Valuation variation H1 2012
Companies
IGBVL (Peru) 3,77% , COLCAP
(Colombia) 4,36% e IPSA (Chile)
5,33% .
With expected foreign investment growth,
trades will multiply by 5 in forthcoming years
Source: BVC
43. Five Innovation Locomotives
Mining
Infrastructure
Innovation
The Innovation
Locomotives: All sectors of
Housing the economy have potential
Agro to go forward in the
knowledge path
(Juan M. Santos, 2010)
44. Productive Transformation Program
Encourage and improve
Promote development of
production of competitive
NEW & EMERGING
products and services
SECTORS
ESTABLISHED SECTORS
Business Process
Outsourcing and
Off shoring
BPO&O
Promote value added,
innovation & development in
AGRIBUSINESS SECTOR
Cocoa and Chocolate Palm and vegetable Shrimp Farming Cattle
Confectionery Oil
45. Infrastructure Opportunities
National Highways
2000 2010 2017*
Number of Highways 11 23 26
Granted
Km. Of Highways 2.002 4.009 6.604
Granted
Km. Of Double Track 50 860 3.487
Air Traffic
Indicator 2000 2009 2019*
Regional Docks
National Passengers (MM) 7.7 10.7 >15
National Load (Ton) 115.522 123.065 >130.000
International Passengers (MM) 2.9 5.6 >11
International Load (Ton) 390.584 481.129 >600.000 2002 2003 2004 2005 2006 2007 2008
National Railroads
INTERNATIONAL TRAFFIC FLUVIAL CABOTAGE INTERNATIONAL TRADE
Project Features Scope Est. Length of Regional Port Societies No. Of Port Year
Execution
Central Construction variant La Current Concessions 5 2008
Corridor of 1.045 km –
Railway Concession for 30 Years
Dorada; M&O Chiriguaná – 2011-2014*
New Developments 5 2010 – 2014*
System Bs.As.; Rehabilitation
New Tracks: 460km TOTAL 10
Corridor to Inland Coal
Carare Train Exploitation
Rehabilitation: 33Km 2009-2014*
Servitude: 62km
* DNP Estimations
46. Opportunities in the Colombian Oil Goods and
Services Sector
The oil sector is Colombia is going strong. There are
opportunities in the Oil Goods and Services sector for
growth and improvements on an international scale.
Growth is projected in terms of the number of wells
explored- 570 by 2014- and extraction- to nearly one
million barrels of oil per day (2012).
The Cartagena Refinery will enter operation in 2013
with a capacity of 165,000 BDP. The demand for goods
and services at this facility as well as the Barrancabermeja
Refinery will increase.
Various investment opportunities exist in producing
high-performing, high-quality goods and developing high-
tech oil services.
Caribbean Zone A regional goods and services exportation platform can
Eastern Central Zone be established for meeting the needs of the Venezuelan,
Southern Central Zone
Bogotá - National Provider
Peruvian and Ecuadorean markets.
New Exploratory Areas
47. Regional Opportunities Health Services
There are 5 metropolitan areas in
Colombia with more than 1.8 million
residents.
These regions have graduated
more than 18,000 physicians and
9,000 nurses in the past 5 years.
There are another 5 mid-sized cities
with populations greater than
500,000 residents.
48. Opportunities in Information Technologies and BPO&O Sector
BPO
Opportunities to create Shared Service Centers for Latam.
Opportunities for Outsourcing Companies providing services
of Costumer Care, ESO, FAO, HRO, and R&D
Software and IT Services
Opportunities for development and integration of IT services
and Applications.
Opportunities for M&A and Software companies
Opportunities for Data Centers
Telecommunications
Opportunities to provide Telecommunication Services in
growing markets, improving its Telecommunication
Infrastructure.
49. Opportunities in Agribusiness Sector
Colombia has competitive advantages such as
land availability, wide water sources and high
exporting potential.
• Biofuels opportunities :
More than 7.3 million hectares ideal for
biofuels production.
High yield in Sugar Cane and Oil Palm.
• Forestry Opportunities: species with
elevated profit margins and short biological
cycles.
• Diary Opportunities:
Fourth milk producer in Latin-
American.
Third biggest market in Latin-
American.
50. Opportunities in Tourism Sector
Opportunities for MICE tourism:
Outstanding behavior of Colombian economy: Historically Colombia has
enjoyed a remarkable economical stability. During the last decade
Colombian GDP has shown superior increases than world´s average, and
has been the less unsteady of South America.
Eight cities with more than 500.000 inhabitants established as important
commercial, development and business areas.
More than 2.500 multinationals in Colombia
In four years, Colombia scaled 16 positions at ICCA Ranking reaching
position 34th on 2010.
Leisure Tourism Opportunities:
International tourism in Colombia, grows three times faster than world
average.
Multi-destination country: Andean Country, Caribbean Country,
Amazonian Country and Pacific Country.
Multiple awards ad a tourism destination such as: “Revelation Destination”.
Wanderlust Magazine. “Destination To Discover”: Lonely Planet. “One of the
destinations to visit on 2010” NY Times.
Highest biodiversity country per squared meter
11.600 new rooms between 2004 y 2010. 12 UNESCO acknowledgements as world heritage.
Investment on 2010 was three times bigger than investment on 2004
51. Mining and Electricity Sector Opportunities
Electric Generation
• Current Capacity: 13.455 MW
Mining • New capacity of 3.445 MW will be
installed within 2012 and 2018 by
Public and Private Companies through
Concession Contracts.
• To Achieve this goal, sector will
demand investments close to US$ 10
Exploration 22 millions hectares
Billions.
Production 2 millions hectares
Techcnical Areas of 17 millions hectares
Evaluation
Hydrocarbons
• Total Investment in Exploration
and Production for the next 5 years
is US$ 24 Billions: Piping US$ 10
Bln, Refining US$ 8 Bln, and
Biofuels US$ 700 Millions Estimated investments in Mining
• Potential of Reserves is estimated sector for the next 5 years is US$
between 8.960-138.631 (MBPe) 4,3 Billions
52. Housing and Innovation Opportunities
Housing Innovation
•Increase participation of Science and
Technology in the national GDP. Target for 2019
is 2%.
•Increase the number of Patents per 100
thousand inhabitants.
•Challenge in Professional Education, increasing
almost 4 times 2006 records for 2012.
• Confidence Index has been improving since 2008, allowing
people take decision to obtain a brand new house.
•Sector is divided into 2 big areas, Social and Regular
Housing, both increasing sales in 69% between 2004 and
2010.
•According to DNP, Housing sector will increase approx 10%
between 2010 and 2011. Target: One million houses in 2014.
53. Colombia offers…
Growing domestic market without signs of saturation
Increasing export trend, covering global and regional
makets in all sectors
Corporative Governance policies among local companies
Quality and availability of human resource to all economy
levels
Strong legal support and incentives to promote Private
Equity in Colombia