DATA

• We selected all funds (FIPs) listed in Comissão de Valores Mobiliários (CVM) that
are classified as Private Equity and Venture Capital by ABVCAP. Dataset is
complemented with funds from Spectra-Insper database, which includes Brazil and
Latin America funds with Investments in Brazil. Fund of funds, real estate,
infrastructure funds and FIPs used as investment vehicles of family holding were
excluded.

• We use financial statements data from CVM to calculate net performance

measures for each FIP. Data from Spectra-Insper database is provided by general
partners and we only use net performance measures.

• 381 funds raised between 1994-2020. 272 are FIPs and 109 are funds from
Spectra-Insper database. 289 are Private Equity funds and 92 are Venture Capital
funds.

• We aggregated FIPs used as investment vehicles for five offshore funds into
portfolios that represent the underlying funds’ investments in Brazilian companies.
PERFORMANCE METRICS
• We estimated cash flows of capital calls, capital distributions, investments in
portfolio companies, divestments, dividends, other proceeds, fees and market
value of the fund’s equity based on the information in the FIPs’ financial
statements in December 2020.

• We estimated the following metrics for net returns: Total Value to Paid-in (TVPI)1,
Distributed to Paid-in (DPI) 2, Internal Rate of Return (IRR) and Public Market
Equivalent (PME) 3.

• We converted the monthly cash flows from BRL to USD using the monthly average
bid exchange rate quoted by the Brazilian Central Bank for the performance metrics
in USD.
1 TVPI = (Sum of all Capital distributed + Portfolio Market Value in 2020)/(Sum of all Capital Called)
2 DPI = (Sum of all Capital distributed)/(Sum of all Capital Called)
3 PME was calculated as the sum of the net present value of cash inflows (distributed capital) and the net
present value of portfolio market value in December 2020, divided by the net present value of cash outflows
(sum of capital called). To estimate the net present value of each cash flow, we used the return of the
benchmark between fund inception and the dates of the respective cash flows.
HIGHLIGHTS
• Private Equity (PE) and Venture Capital (VC) were a profitable investments despite
of the Brazilian economic turbulance and currency devatualiton.

• The average net TVPI in BRL was 1.93 and net IRR in BRL was 17.5% p.a.

• The average net TVPI in USD was 1.55 and net IRR in USD was 11.2% p.a.

• Investments in PE and VC funds outperformed Ibovespa, MSCI EM and CDI

(Brazilian libor).

• Brazilian first quartile funds have results in line with world first quartile funds.

• Venture capital funds outperformed private equity funds in the last decade.
NUMBER OF
PRIVATE
• ABC
EQUITY
AND
• XYZVENTURE 3

CAPITAL
• TRA FUNDS 11
12

BY VINTAGE 8
6

7
5 7
1 13
1 47 10
40
38
36
1
32
25 26 8
23 3 24
21
1 18 18
15
10 9
7

Private Equity Venture Capital

AMOUNT OF
CAPITAL
• ABC
RAISED
AND
• XYZ 7,0
7,7

DISTRIBUTED
• TRA BY 6,1
6,3
6,1

FUNDS’ 5,4 5,5

5,1

VINTAGES
4,8
4,6
4,2 4,1

(IN USD BILLION) 2,9

3,4 3,4
3,0
3,3
3,1

2,5
2,0
1,7
1,5 1,5 1,4
1,2 1,2 1,2 1,3

0,5 0,4
0,2 0,3

Capital Called Capital Distributed

AVERAGE TVPI
AND DPI BY
• ABC
2,8

VINTAGE
• XYZ IN USD 2,5

• TRA
2,1
2,0

1,7 1,7 1,7

1,6 1,6 1,6

1,3 1,3
1,2
1,1 1,1 1,1 1,1
1,0
0,9
0,8
0,6

0,3 0,3
0,2 0,2 0,2 0,2 0,2
0,1 0,1 0,1 0,1

TVPI USD DPI USD

AVERAGE TVPI
AND DPI BY
• ABC
VINTAGE
• XYZ IN BRL 4,3
4,2

• TRA

2,5

2,0 2,0
1,9
1,8 1,8 1,8
1,6 1,6 1,5
1,5 1,5 1,4
1,4 1,4
1,3
1,1 1,0
0,8 0,8
0,7
0,6

0,2 0,1 0,2 0,2 0,1 0,1 0,1 0,1

TVPI BRL DPI BRL

AVERAGE IRR BY
VINTAGE
• ABC 35%

• XYZ 31%
• TRA

22% 22% 27%

18%
20%
14%
13% 13% 12% 13%
12% 11%
14% 15%
8%
10% 5%
7% 7%
6% 1% 2%
4%
2%
1%
-1%
-4% -3%
-4%
-7%

IRR BRL IRR USD

AVERAGE IRR BY
VINTAGE
• ABC
IN USD
40%
• XYZ 36%
39%

• TRA

24%
20% 20%
18%

10% 17%
10%

11% 12% 11%

10%
4%
2%
1% 6%
3%
-5% 1%
-2%
-6%
-8%

-15%
-15%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

IRR USD - Venture Capital IRR USD - Private Equity

AVERAGE IRR BY
VINTAGE
• ABC
IN BRL
• XYZ 48% 48%

• TRA
35%
37%
27% 28%
24% 23%

18%
14% 15%
20%
18%
7% 8% 15%
12% 12%
8% 7% 8%
5% -1%

0%
-3%

-8%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

IRR BRL - Venture Capital IRR BRL - Private Equity

AVERAGE PUBLIC
MARKET
• ABC
6,4

EQUIVALENT
• XYZ BY
VINTAGES
• TRA

ACCORDING TO 4,4

DIFFERENT 3,6 3,5

3,1 3,2

BENCHMARKS 2,9 2,9 3,0

2,7
2,6
2,4 2,3 2,4 2,4 2,4
2,3 2,2
2,0 2,1 2,1 2,0 2,1
2,0
1,8 1,8 1,8 1,8
1,6 1,7 1,7 1,7 1,6
1,4 1,5 1,5 1,4 1,5 1,6
1,2 1,2 1,2 1,2
1,0 1,0
0,6
0,4 0,4

PME Ibovespa PME CDI PME MSCI EM

DISPERSION OF
NET MOIC AND
NET IRR
TVPI BRL TVPI USD IRR BRL IRR USD
Maximum 23.00 16.40 368.4% 307.0%
Average 2.93 2.40 60.6% 52.2%
Quartile Bottom 1.94 1.65 29.4% 24.0%
Average 1.60 1.35 21.6% 15.7%
Quartile Bottom 1.31 1.09 14.2% 9.0%
Average 1.13 0.91 5.9% 1.0%
Quartile Bottom 0.96 0.76 0.1% -6.3%
Average 0.58 0.45 -18.4% -24.4%
Quartile Bottom 0.00 0.00 -70.7% -100.0%
Mean 1.93 1.55 17.5% 11.2%
DISTRIBUTION
OF• NET IRR
33%

ABC 29%

• XYZ
• TRA
22% 22%
20%

17% 17%
16%

11%

8%

2% 3%

-100% , -50% -50% , 0% 0% , 10% 10% , 20% 20% , 50% 50%+

IRR BRL IRR USD
DISTRIBUTION
OF• NET
ABC
IRR IN 38%

USD
• XYZ
30%
• TRA

24%

21% 21%
18%
16%

13%

10%

5%
3%
1%

-100% , -50% -50% , 0% 0% , 10% 10% , 20% 20% , 50% 50%+

IRR USD - Private Equity IRR USD - Venture Capital

DISTRIBUTION
OF• NET
ABC
IRR IN 41%

BRL
• XYZ
• TRA
31%

25% 25%
23%

15%
13%

10%

6% 6%

3%
1%

-100% , -50% -50% , 0% 0% , 10% 10% , 20% 20% , 50% 50%+

IRR BRL - Private Equity IRR BRL - Venture Capital

PERFORMANCE 180%

OF• FUNDS’
ABC
170%
160%

QUARTILES
150%
140%
• XYZ 130%

BASED ON NET
120%
• TRA 110%
100%

IRR IN BRL 90%

80%
70%
60%
50%
40%
30%
20%
10%
0%
-10%
-20%
-30%
-40%
-50%
-60%
-70%
-80%

MAX BOTTOM Q1 BOTTOM Q2 BOTTOM Q3 MIN

PERFORMANCE 180%

OF• FUNDS’
ABC
170%
160%

QUARTILES
150%
140%
• XYZ 130%

BASED
• TRA ON NET 120%
110%
100%

IRR IN USD 90%

80%
70%
60%
50%
40%
30%
20%
10%
0%
-10%
-20%
-30%
-40%
-50%
-60%
-70%
-80%

MAX BOTTOM Q1 BOTTOM Q2 Bottom Q3 MIN

PERFORMANCE
OF• VENTURE
ABC
80%

CAPITAL
• XYZ FUNDS’ 70%

BASED
• TRA ON NET
IRR
60%

50%

40%

30%

20%

10%

0%

Bottom Q1 IRR BRL Average IRR BRL Bottom Q1 IRR USD Average IRR USD
PERFORMANCE 50%

OF• VENTURE
ABC
CAPITAL
• XYZ FUNDS’ 40%

BASED
• TRA ON NET
IRR 30%

20%

10%

0%

Bottom Q1 IRR USD Average IRR USD

Bottom Q1 Preqin Benchmark IRR USD Average Preqin Benchmark IRR USD
PERFORMANCE 50%

OF• PRIVATE
ABC
EQUITY
• XYZ FUNDS’ 40%

BASED
• TRA ON NET 30%

IRR 20%

10%

0%

-10%

-20%

Bottom Q1 IRR USD Average IRR USD

Bottom Q1 Preqin Benchmark IRR USD Average Preqin Benchmark IRR USD
CONCLUSION
• 45% of the funds had a net TVPI in BRL higher than 1.5 (33% of the funds in USD).

• 47% of the funds had a net IRR in BRL higher than 15% (39% of the funds in USD).

• Despite the economic turbulence, funds were on average profitable investiments in

BRL terms. PE and VC funds outperformed equivalent investiments when compared
with Ibovespa, CDI and MSC EM.

• The difference between first quartile and bottom quartile in Brazil was 29% in BRL
and 30% in USD.

• There is a group of experienced and skilled PE and VC fund managers in Latam. Top
quartile funds had, on average, TVPI of 2.9 and IRR of 60% in BRL and TVPI of 2.4
and IRR of 52% in USD.
People Involved in this research
Andrea Maria Accioly Fonseca
Minardi Rafael Honório Bassani
Insper Spectra

Humberto Gallucci Netto Ricardo Kanitz

Spectra Spectra

Isabella de Godoy Silva Rodrigo Paz Freitas Junior

Insper Insper
João Paulo dos Santos Marques
Rubia Muniz Arruda
Vieira Insper
Insper
Marcio Sabalo Barea
ABVCAP