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Investment by private equity firms reaches lowest level since 2019

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Investments made by private equity funds fell in the first quarter to the lowest level since 2019, according to data from the Brazilian Private Equity and Venture Capital Association (Abvcap) compiled in partnership with TTR Data. During the period, the contributions totaled R$600 million in 17 companies, down 92% quarter over quarter and 87% year over year.Among the most important investments made by the funds at the beginning of the year is Warburg Pincus’s injection in the technology company Scanntech (R$208 million) and 23S’s investment in Ademicon (R$300 million). Last year, R$18.98 billion were invested by private equity funds. In 2021, the disbursement totaled R$15.81 billion.According to Abvcap, the allocation of venture capital funds, which are focused on startups, shrank to R$1.42 billion from January to March, down 42% quarter over quarter. The decrease was also observed in the so-called corporate venture capital, a group formed by funds of already mature companies that invest in startups, which fell to R$180 million in the same period - down 70% and the lowest value since the beginning of 2021.According to Piero Minardi, Abvcap’s president, the sharp decline in the volume of investments is driven by the volatile scenario, both domestically and abroad, especially with interest rates affecting the value of companies. "Valuations have not yet been corrected, but the current discussions are expected to be reflected in second-half figures," Mr. Minardi said.The Abvcap executive said there are, on the other hand, many ongoing conversations in the industry and recalls that the main funds, the most active in the country, are capitalized and therefore ready...

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