Case Study

Tribecapital Partners (Colombia): Private equity in Latin America

24 pages
April 2009
Reference: IMD-3-2027

It was only in 2004 that Luc Gerard was formally introduced to the world of private equity. From that moment on, it literally took over his life. He had been managing growth and acquisitions for large corporate entities for years; the step toward doing it privately seemed not only natural but also long overdue. He thought he had an edge too: He knew the Colombian market inside out. In comparison to the US and Europe, Latin America was still largely untapped by private equity, and this despite the fact that regional economies were growing fast and many successful enterprises were emerging and thriving. In Colombia, where Luc had been living and working for years, he had encountered many businesses with fantastic growth potential. At a personal level, his entrepreneurial spirit was getting restless. The reputation he had built in the region as dealmaker and enabler presented him daily with opportunities he could hardly resist anymore. But setting up a private equity vehicle was no piece of cake. With no experience in an industry that relied primarily on track records, getting Tribeca – TribeCapital Partners – off the ground would not be easy. Colombia was clearly ripe for private equity but with no proven investment experience to their names, Luc and his partner Gerardo León were not in a position to attract investors immediately. First, they would have to prove themselves as investors, dealmakers, managers and value creators. With pre-fund money, they endeavored to build that early track record, acquiring three companies within the first year of operation and moving swiftly to expand them. With these visible deals under their belts, they proceeded to formally raise funds for Tribeca Private Equity Fund I. By early 2008, Tribeca ran a team of 20 employees, had five companies in portfolio and managed commitments of close to US$330 million, making it one of the largest private equity funds in Latin America. The question was, what next?

Learning Objective

Understand the issues of setting up a new private equity/growth capital vehicle in an underdeveloped market such as Colombia. How do you balance the opportunities of such an open investment environment with the clear obstacles to private equity transactions? How do you establish a track record quickly to attract institutional investors to a new fund? How do you build a strong deal pipeline, gaining acceptance in a market not accustomed to private equity transactions?

Keywords
Private Equity, Fund Management, Track Record, Growth Capital, Raising Capital, Investment Management, Reputation, Fashion, Energy
Settings
Latin America, Colombia
Tribeca, Finance and Insurance, Financial Services
2006-2008
Type
Field Research
Copyright
© 2009
Available Languages
English
Related material
Teaching note, Video
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