July 1, 2012
Interviewed by: David Snow

Expert Q&A With Carlos Asciutti

Carlos Asciutti, Partner at EY, speaks with Privcap about helping Brazilian private equity firms become more successful.

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Privcap: What are the most valuable resources private equity firms can bring to Brazilian businesses?

Asciutti: There will be two important issues here. One is the corporate governance culture, and bringing new processes, new controls, new advisory boards to the companies. That is very important for family-owned business, which represents most of the companies in Brazil.

The second would be a strict business plan– have a business plan that is written, that is agreed by the management, agreed by the shareholders, and something that the management has a north of where to go with the business plan. So I think corporate governance and business plan are probably the most important things that the bring to the table, to a family business in Brazil.

Privcap: How does Ernst & Young help private equity firms be more successful in Brazil?

Asciutti: The advisory service that we bring in looking from the time that the PE does the due diligence, understanding the business, understanding the financial history of the company, we do all that work, helping them understand the business. We help them while they have the business in their hands for over the three, four, five, six years the PEs hold the business, hold the portfolio. And then on the exit of the portfolio, we help them going public, we help them with the audits, and advisory services on going public.

But probably the most important thing here is cultural, is helping especially international private equity houses understand the family businesses in Brazil, and for the family businesses to understand what are the requests and the requirements of an international private equity. So building that bridge of cultural differences is also very important in our service.

Privcap: How extensive is Ernst & Young’s presence throughout Brazil?

Ascuitti: We have 14 offices in Brazil, including the North, Northeast, and the South, the Southeast of Brazil A lot of these PEs, and a lot of the businesses, like you said, they’re not only in Rio and Sao Paolo, but they are up in the North. In the North, if you take Brazil as a region, is probably larger than the US without Alaska. So it’s a pretty large country, and some of the growth of the country is in places other than Sao Paolo and Rio. So you have to be in these places from a services line, from an advisory services perspective, just like the businesses are.