Private equity managers specialized by industry and with an increasing focus on value creation have become the global trend in the last four years. Competitiveness and rising prices for good businesses caused a change: it became imperative to explain to investors a strategy more capable of accelerating companies’ growth.
It is not a new reality for Brazil, points out an excerpt from the “Global Private Equity Report”, dedicated to negotiations for the participation of companies in the region.
For different reasons, closely related to structural economic factors, Brazilian managers have become accustomed to operating with deep sector and company expertise, as well as focusing on revenue growth and margin expansion, preparing investment for an opportune moment of liquidity.
“Most houses are either specialized managers or, when you ‘open the hood’, you see that there are two or three teams in which the decision maker understands a lot about the sector”, explains Bain & Company partner and leader of the Private Equity practice for South America, Gustavo Camargo, in an interview with InfoMoney.
The research, conducted for the first time with a regional focus in Brazil, captured data and perceptions from around 80% of local managers and 40% of investors with a position in the country. To preserve confidential information, the data was treated exclusively in an aggregated form by Bain & Company.
According to the report, a detailed due diligence (analysis and audit between the parties to the business) was carried out. The process, says the study, goes beyond financial analysis, including in-depth assessment of operations, market dynamics, competitive positioning and management team. This more integrated approach is used by the most successful investors.
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On the other hand, the unpredictable behavior of liquidity windows in Brazil and the high cost of debt produced by high levels of interest rates stimulated, in the process of consolidation of the local private equity industry, a particular dedication to generating value.
“As companies cannot generate money with leverage and are not sure about the duration of the windows, the only thing they can control is cash generation”, says Camargo. “It’s even curious that, when interviewing people, they didn’t even consider this here as something different in Brazil.”
Typically, investments in Brazil are born with a value creation plan to reach the moment managers leave, points out the Bain partner. As it is not known when it will be possible to sell, companies are preparing to be sold at any time, when market appetite returns. You need to be generating cash and “have a story to tell the next investor”, he points out.
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The Brazilian private equity “manual”
The research, which sought to determine consolidated characteristics of the Brazilian market, also describes two other characteristics of the “manual” of Brazilian managers: gradual allocation of capital over time and conservative use of leverage.
In the first case, the main influence is the volatility of the exchange rate between reais and dollars — the currency in which deals are closed. By distributing investment commitments in a phased manner over years, managers would reduce exposure to specific exchange rate shocks and position themselves for entries at more favorable points. The conservative use of leverage is attributed to interest rates.
But it is in the first two characteristics, specialization and value generation, that the world has gone against Brazil. “These elements, in the last four years so far, are becoming the most important thing in the world”, points out Camargo.
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Across all sectors, company trading values rose in the global analysis. In technology, for example, the jump was 30% when comparing 2024 with 2025, when it reached US$265 billion. In the essential services and energy sector, the increase was 75% in the same period, to US$ 157 billion, points out the Bain & Company document.
“Between prices being very high and the competition among managers being very high, explaining to the investor why the company will be able to generate value and, effectively, accelerate the growth of companies, has become a strategic imperative in private equity in the world. In different ways, it is somewhat the rule of the game in Brazil”, says Camargo.
