November 25, 2016
Interviewed by: David Snow
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Advent: Back in Argentina

After having invested in Argentina for 17 years, Advent International withdrew five years ago. Now the firm is back looking for deals amid a changed political environment. Patrice Etlin, who heads up Latin America for Advent, discusses what the firm’s deal flow looks like in a market that has been almost entirely shunned by private equity.

After having invested in Argentina for 17 years, Advent International withdrew five years ago. Now the firm is back looking for deals amid a changed political environment. Patrice Etlin, who heads up Latin America for Advent, discusses what the firm’s deal flow looks like in a market that has been almost entirely shunned by private equity.

Advent: Back in Argentina
With Patrice Etlin of Advent International

David Snow, Privcap:
We’re joined today by Patrice Etlin of Advent International. Patrice, welcome to Privcap. Thanks for being here.

Patrice Etlin, Advent International:
It’s a pleasure.

Snow: Is your firm starting to look at Argentina now? If so, what led to the new interest?

Etlin: We have [had] an office in Buenos Aires in Argentina for 17 years. We started back in 1996—it was our first office in the region—and we left Argentina five years ago, not so much because of the macro. Actually, bad macro for us has been an opportunity to find good deals and do good transactions. But, with the Kirchner government in place, we were facing issues of rule of law, control of capitals, changing tax regulations on our companies, unions. It was a very complex and complicated situation; [with] a lot of political interference in the market.

With the new government in place, the Macri Administration, [being] very business friendly—it’s a superb team in place, particularly on the economic ministry and planning. With that, we see an administration that is much more business friendly, open and wanting to attract institutional, international investment like us to the country. Valuations are low, so our challenge there is to be able to find large companies writing the $150- or $200-million checks. We see those opportunities [with] more infrastructure, energy related, which we don’t do so much, so that’s why we’re spending time. We have capped the Argentine team inside our other offices—in São Paulo, Mexico and Bogota—and that team has been spending time on the ground there.

Snow: What sectors are of greatest interest?

Etlin: We are moving in retail; we’re looking at some consumer retail opportunities right now there. Also, there’s a very interesting financial service opportunity around payments actually going on there in the market. And healthcare has been very strong for us. We own two pharma companies in Argentina and we have a long track record of knowing management teams and a good story around healthcare in Argentina. So, that’s been also a big focus for us.

Snow: Are you considering opening an office there?

Etlin: Eventually. We will during LAPEF VI, which is our current fund we are investing in the region. We intend to have one or two deals out of Argentina. If that develops, yes, maybe we will come back and open an office.

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