Geert Aalbers, senior director and head of Control Risks in Brazil seems to be in the right place at the right time. His global consulting venture, which operates in the country for 20 years, has recorded substantial growth since last year.
Without prejudging the numbers, Aalbers says 2016 will be the best year of the company in Brazil. With the political crisis and Petrobras scandal, the demand for analysis of integrity and political risk, investigations and due diligence for mergers and acquisitions has increased significantly. "We are seeing great interest from international investors, private equity funds, pension funds, large conglomerates, all trying to understand the scene and looking for good opportunities to put your feet in Latin America," he says.
With the recession and the devaluation of the real, Brazilian companies have never been so cheap.
Brazilian assets have become so cheap that some analysts came to qualify Brazil, along with other emerging markets, as the deal of the decade. The Brazilian currency depreciated significantly against the dollar in 2015 and despite the recovery seen in the first months of this year is still the lowest value since 2003.
With the recession and the devaluation of the real, Brazilian companies have never been so cheap. Many of them affected by the crisis and the corruption scandal at Petrobras, are selling most of its assets. This is the case of BTG Pactual, the leading independent investment bank in Latin America. Since the founder and CEO of the bank, André Esteves, was arrested on charges of trying to disrupt the investigations of the corruption scheme, BTG divested major assets such as the Swiss bank BSI control and actions in Rede D'Or are Luiz, the largest network of private hospitals in the country. According to a report by Thomson Reuters intelligence area, the bank acted in ten trades in the first quarter of this year, totaling US $ 2.779 billion.
"If the country has a good base, if progress has been made over the years, so when a crisis like this happens is the right time to invest, "
Petrobras, with a debt that exceeds $ 130 billion, also plans to sell $ 15 billion in assets by the end of the year.
Robert Abad, founder of consulting in emerging markets EM + BRACE, based in California, says Brazil is still one of the most promising nations in Latin America. "There is a philosophy that every investor in emerging markets need to have. If the country has a good base, if progress has been made over the years, so when a crisis like this happens is the right time to invest, "he says.
Data from financial platform Dealogic show that the total number of mergers and acquisitions in Brazil reached US $ 22.59 billion in the last quarter of 2015, the best quarter since 2013 and the third best since the data started being recorded in 1995 .
Another report from PricewaterhouseCoopers (PwC), pointed out that the number of mergers and acquisitions in Brazil in 2015 decreased by 16% compared with the previous year. But if only considered the negotiations closed by foreign investors in the country, the number goes up 1% from 338 in 2014 to 342 in 2015. For the first time since the report began to be made, more agreements were signed by investors from other countries than for Brazilians.
stock exchange of São Paulo, was up more than 23% in the first months of this year
Control Risks consultancy sees opportunities in a number of sectors, such as infrastructure, renewable energy, health and education. "Brazil is a huge country with great needs in key areas such as infrastructure. The new cycle of development will require investments and the government will work to improve the incentives and returns for investors, "says Aalbers.
" if you have a long-term view, it is a good time to invest in Brazil"
After reaching, in January, the lowest since 2008, the Bovespa Index, the main indicator of the stock exchanges of São Paulo, was up more than 23% in the first months of this year, and became one of the investments with the best performance the world in 2016. the increase was influenced by the advance of the president's impeachment Dilma Rousseff, since the end of the political impasse is seen by investors as an important step towards the resumption of economic growth.
Caio Mesquita, founder of independent consulting Empiricus investments, says the market should continue to respond positively to the change of government. "What will happen from here on out depends largely on the kind of government that will be formed, but, anyway, if you have a long-term view, it is a good time to invest in Brazil."
Aalbers, Control Risks, lived in Brazil for 18 years and says that there are two ways to look at the country. "The first is with euphoria, as we have seen during the boom of the country. The second is with realism. The risks and costs of doing business in Brazil are high and will remain at least for a while. Investors who are prepared to understand the scenery and absorb these costs, will succeed. "
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