Preqin has launched its first Latin America-focused report. “Preqin Markets in Focus: Latin America’s Growing Appetite for Alternative Assets” explores the emerging market and trends paving the region’s future in the alternatives industry. With diverse challenges and opportunities unique to the economies and investors in the region, this report reveals how Latin America is leaving the global pandemic behind and expanding further into the world of alternative investments.

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The region’s gross domestic product fell an estimated 7.4% in 2020, according to the International Monetary Fund1, compared to the 2.4% decline of the broader emerging markets and 4.9% drop in GDP for advanced economies. The pandemic put some alternatives allocation plans on hold as investors throughout Latin America had to adjust for short-term liquidity needs.

However, over the long-term, Preqin sees a bright future for private capital in the region. Latin America’s growing middle class and early pension reforms have created a significant pool of assets to invest in private capital. The size of the private equity industry in Latin America has remained stable in recent years, despite challenges. As of June 2020, total AUM stood at $28bn, including $7.2bn in dry powder. Venture capital is a bright spot in the region. The arrival of SoftBank’s $5bn dedicated Latin America fund is starting to inject significant impetus into the sector, and government-backed incubators are creating an entrepreneurial ecosystem in Chile and Peru.

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