{"id":124340,"date":"2024-07-24T13:15:28","date_gmt":"2024-07-24T11:15:28","guid":{"rendered":"https:\/\/llyc.global\/?p=124340"},"modified":"2024-10-22T14:30:40","modified_gmt":"2024-10-22T12:30:40","slug":"future-challenges-in-the-private-equity-industry-and-adapting-to-changing-conditions-in-mexico-and-latin-america","status":"publish","type":"post","link":"https:\/\/llyc.global\/en\/corporate-affairs\/tendencias\/future-challenges-in-the-private-equity-industry-and-adapting-to-changing-conditions-in-mexico-and-latin-america\/","title":{"rendered":"Future challenges in the private equity industry and adapting to changing conditions in Mexico and Latin America"},"content":{"rendered":"<p>&#8220;Generating returns was almost too easy in the last decade,&#8221; remarked <strong>Marc Nachmann<\/strong>, Global Head of Asset and Wealth Management at Goldman Sachs, at the SuperReturn International conference in Berlin earlier this month.<\/p>\n<p>Nachmann&#8217;s comment highlights the <strong>unprecedented boom the global private equity industry has enjoyed<\/strong> since 2010, driven by low interest rates and high stock market valuations. According to Bain &amp; Company, <strong>from 2010 to the first half of 2022<\/strong>, the industry hit<strong> record highs<\/strong>, closing 2022 with $654 billion in buyouts, $565 billion in exits, and $347 billion in fundraising.<\/p>\n<p>However, in the dynamic world of private equity, the adage <strong>&#8220;what goes up must come down&#8221;<\/strong> is particularly resonant. After reaching historic highs, the market now faces an inevitable correction. While stock market valuations remain high, the <strong>Federal Reserve<\/strong> and other central banks have started <strong>raising interest rates<\/strong>, reducing cheap financing and, consequently, exits and fundraising.<\/p>\n<p>As <strong>Scott Kleinman<\/strong>, Co-President of Apollo Asset Management, put it, &#8220;The types of returns enjoyed for many years until 2022 won&#8217;t be seen again until the snake digests the pig. That&#8217;s simply the reality of where we are.&#8221;<\/p>\n<p>After two years (2022-2024) of declining deal numbers and returns, the <strong>industry is questioning if it has hit rock bottom and is seeking to generate momentum<\/strong> through &#8220;micro&#8221; solutions to macroeconomic complexities.<\/p>\n<p>&#8220;<strong>Operational excellence<\/strong>&#8221; was a recurring theme at SuperReturn, referring to the ability of private equity funds to engage in and <strong>improve the operations and management of acquired companies<\/strong>, boosting margins and returns for shareholders.<\/p>\n<p><strong>Mexican and Latin American companies are not immune to this economic cycle<\/strong>. They must prepare, much like Sisyphus challenging gravity.<\/p>\n<p>Beyond macroeconomic factors, the private equity industry in Mexico and Latin America faces <strong>unique challenges<\/strong>. In Mexico, sociopolitical changes present a significant obstacle. The <strong>leftward shift in political power<\/strong> since 2018 is expected to continue until at least 2030, potentially impacting private equity through proposed reforms like the popular election of Supreme Court justices.<\/p>\n<p>This presents a challenge to the institutional counterbalance that has supported private enterprise, creating a <strong>scenario of political and economic uncertainty<\/strong> that could negatively impact legal security, essential for the flourishing of private equity.<\/p>\n<p>Although Mexico&#8217;s virtual president-elect has <strong>taken steps to reassure investors<\/strong>\u2014meeting with around 500 business leaders, receiving a positive response to her cabinet, and presenting her &#8220;Shared Prosperity&#8221; project\u2014<strong>political and economic concerns remain<\/strong>.<\/p>\n<p>Nevertheless, <strong>this is not the time to sound alarms<\/strong>. While returns may not come as easily as in the last decade, <strong>it is an era for bold players to thrive<\/strong>, those who find the best market opportunities and implement superior operational solutions, achieving significant returns for shareholders in the short and medium term and potentially establishing a long-term presence in the Mexican and Latin American markets, which promise expansion in the coming years and perhaps a return to the extraordinary returns seen in the past decade.<\/p>\n<p>&nbsp;<\/p>\n<p><em><strong>Santiago Ferrer<\/strong><\/em><br \/>\n<em><span style=\"font-weight: 400;\">Partner of Cuatrecasas Mexico<\/span><\/em><\/p>\n<p><em><strong>Emilio Ruvalcaba<\/strong><\/em><br \/>\n<em><span style=\"font-weight: 400;\">Associate at Cuatrecasas Mexico<\/span><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Generating returns was almost too easy in the last decade,&#8221; remarked Marc Nachmann, Global Head of Asset and Wealth Management at Goldman Sachs, at the SuperReturn International conference in Berlin earlier this month. Nachmann&#8217;s comment highlights the unprecedented boom the global private equity industry has enjoyed since 2010, driven by low interest rates and high [&hellip;]<\/p>\n","protected":false},"author":17,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[133],"class_list":["post-124340","post","type-post","status-publish","format-standard","hentry","category-corporate-affairs"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.7 (Yoast SEO v24.7) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Future challenges in the private equity industry and adapting to changing conditions in Mexico and Latin America - LLYC<\/title>\n<meta name=\"description\" content=\"Beyond macroeconomic factors, the private equity industry in Mexico and Latin America faces unique challenges.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/llyc.global\/en\/corporate-affairs\/tendencias\/future-challenges-in-the-private-equity-industry-and-adapting-to-changing-conditions-in-mexico-and-latin-america\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Future challenges in the private equity industry and adapting to changing conditions in Mexico and Latin America\" \/>\n<meta property=\"og:description\" content=\"Beyond macroeconomic factors, the private equity industry in Mexico and Latin America faces unique challenges.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/llyc.global\/en\/corporate-affairs\/tendencias\/future-challenges-in-the-private-equity-industry-and-adapting-to-changing-conditions-in-mexico-and-latin-america\/\" \/>\n<meta property=\"og:site_name\" content=\"LLYC\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/LLYC.Global\/\" \/>\n<meta property=\"article:published_time\" content=\"2024-07-24T11:15:28+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-10-22T12:30:40+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/llyc.global\/wp-content\/uploads\/2024\/07\/mobile-Cuatrecasas.png\" \/>\n\t<meta property=\"og:image:width\" content=\"354\" \/>\n\t<meta property=\"og:image:height\" content=\"316\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Pedro Arg\u00fcello\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@llorenteycuenca\" \/>\n<meta name=\"twitter:site\" content=\"@llorenteycuenca\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Pedro Arg\u00fcello\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Future challenges in the private equity industry and adapting to changing conditions in Mexico and Latin America - 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