Investors in Latin America displaying greater appetite for risk
Event Report
Investors in Latin America displaying greater appetite for risk
Issues such as the Trump administration in the US , immigration and the Brexit issue in Europe , have shown investors that , despite such upheavals , business continues as usual
While political risk has long been a consideration for businesses investing in Latin America , investors in the region now seem to be displaying a much greater appetite for risk in general , attendees at an event organised by The Latin American Lawyer in New York heard .
Participants in the event – which was staged in collaboration with Debevoise & Plimpton and Affinitas – were told that while investment in Latin America is stymied by the high incidence of corruption , and geopolitical uncertainty , such problems are not a new phenomenon . However , what has changed is that people have learned
to live with much more volatility .
Global political developments have had a role to play in this respect . Issues such as the Trump administration in the US , immigration and the Brexit issue in Europe , have to some extent shown investors that , despite such upheavals , business continues as usual , and this has led to a change in the way risk is perceived , panellists agreed .
What companies must do is acknowledge that , while they cannot combat geopolitics in the region , engaging with it is important . Companies can play a proactive role at a trade association level , for example , and try to influence , while also being reactive to any political or economic changes . Attendees were also told that companies have to fully understand their role – and the role of their client or business partner – especially if they are operating in a highly regulated industry such as telecommunications . This is vital
Left to right : Patricio Trad , Mijares Angoitia Cortes y Fuentes , Iván Sandoval , Colgate- Palmolive , Maurizio Levi-Minzi Debevoise & Plimpton
if a business plans to remain in the market for the long-term , panellists heard .
Be aggressive Companies were also urged to take an aggressive approach to the political environment . It is important that companies anticipate
Dietmar Prager , Debevoise & Plimpton
what is the future holds in terms of the politics , while lawyers and in-house counsel have to be agile , understanding the impact of regulatory changes , and finding ways to work with governments in order to achieve common goals .
The most important driver of investment in all Latin American countries is the growth of the middle class , panellists agreed . Investors are looking for market share and , in many countries , and particularly in Brazil , there is significant investment in infrastructure . In terms of M & A deals , there continues to be significant gaps between buyers and sellers valuations . An increase in projects and M & A deals in the region is coupled with growth in litigation and disputes in the region . Such cases need to addressed using more sophisticated strategies . Meanwhile , investment projects can sometimes be impacted by “ inward-looking ” governments in larger economies , panellists heard .
Event : Sailing close to the wind : M & A and arbitration in Latin America in a new geopolitical era
Location : New York , US
In collaboration with : Debevoise & Plimpton and Affinitas
10 • THE LATIN AMERICAN LAWYER • September 2018 www . iberianlawyer . com / latin-america