Performance of Brazilian Private Equity and Venture Capital Investments 1994-2023 (Spectra Investments)

Summary

• The Brazilian PE and VC industry recorded an average gross MOIC in BRL of 5.8.p.2
• In USD terms, the estimated average gross MOIC for Brazilian PE and VC stood at 2.9.p.2
• Tech deals represented 46% of the analyzed sample, displaying 40% total losses alongside 13% achieving an MOIC above 5x.p.2
• Non-tech deals registered a 9% total loss rate, with 11% delivering an MOIC greater than 5x.p.2
• Sales to strategic buyers represented the largest exit route at 50% of total exits for both tech and non-tech deals.p.2
• Trade sales in the tech sector generated the highest gross IRR at 91% and the second highest MOIC at 8x.p.2
• Non-tech IPOs delivered an average gross IRR of 79% and an average gross MOIC of 4.5.p.2

Key insights

1. Tech deals achieved a higher average gross MOIC in USD of 3.9 compared to 2.6 for non-tech deals.p.2
2. Outliers in the tech sector generating an MOIC higher than 5x accounted for 15% of deals but contributed 85% of the average sector return.p.5
3. The spread in USD IRR between the top decile and top quartile reached 65.8% for tech deals, compared to 38.6% for non-tech deals.p.5
4. The tech sector exhibited negative USD returns in 53% of cases, whereas the non-tech sector experienced negative returns in 28% of deals.p.6
5. Brazilian Real devaluation impacted USD returns, as average tech MOIC increased from 6.2 in USD to 7.8 in BRL.p.7
6. Sales to PEVC funds achieved the highest overall MOIC among exit routes in USD at 8.4x.p.8
7. Tech IPOs registered an average holding period of 10.3 years in USD, more than double the holding period for tech trade sales and PEVC sales.p.9
8. In BRL terms, tech IPOs achieved an average MOIC of 29.5 with an IRR of 54%.p.9