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NEO Investimentos raises more than one-third of Fund III

26 Aug 2014

brazil 2Brazilian private equity firm NEO Investimentos is seeking $300m for its third fund, which has already raised more than a third of its target.

The firm is looking to raise $150m from Brazilian investors and an equal amount from international LPs for NEO Capital III, US regulatory filings showed.

The fund has already secured a $50m commitment from the Overseas Private Investment Corporation (OPIC).

Data from OPIC also showed that the fund has already secured $120m.

NEO plans to raise most of the funds from wealthy Brazilian families and domestic institutional investors including pension funds, sources told PeHUB.

The report said NEO has not offered pension funds seats on the investment committee. Brazilian pension funds usually seek to have an active role in investment decisions, which has prevented them from getting access to international GPs, which are not interested in turning investment control over to LPs.

“No one has managed to get foreign LPs to agree to be in the same fund with local LPs with investment committee,” an LP told PeHUB.

The fund will invest between $30m and $70m in mid-market companies with revenues of over $50m, looking to back six to eight businesses.

Deutsche Bank’s head of primary and direct investments for the Americas David Koh recently told AltAssets that there is a “greater willingness” among Latin American LPs to invest in local private equity funds.

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