Time to invest: what are the areas in the sights of large funds?
Sectors such as biotechnology, real estate and infrastructure are the ones that arouse most interest among investor groups.
Biotechnology, infrastructure and real estate are some of the sectors in which the main investment funds are setting their sights. Although there is still uncertainty among large and international groups as to whether or not the time has come to invest in the country, some sectors are already emerging as attractive business opportunities beyond the Argentine risk and taking advantage of local asset prices. "We invest in private equity, that is, we buy cheap to sell more expensive. Therefore, the business is to buy now. I cannot wait to close a deal when all the news is already priced with the change in the economy", said Martín Otero Monsegur, shareholder of the citrus company San Miguel and partner of Towerco Investments, one of the investment funds that is on the hunt for opportunities in the local market.
Otero Monsegur was one of the speakers at the RepensAR Summit, held at Malba. At the meeting, which brought together many of the major investment funds that are investing in the country or are looking for projects, the potential offered by the Argentine market was highlighted, especially in some specific areas.
"There is a very big opportunity for the development of new biotech companies. Globally, there is a growing search to digitize activities that make it possible to lower production costs. Initially, these projects were very focused on the pharmaceutical industry, but today we see the possibility of transforming scientific knowledge into productive companies in forestry, agricultural or livestock projects", explained Matías Peire, co-founder of the Gridx fund, which has among its first investors Miguel Galluccio, former president of YPF and who currently operates his own oil company, Vista Oil & Gas.
Matías Peire: "There is a great opportunity for the development of new biotechnology companies. Globally, there is a growing search to digitalize activities that make it possible to reduce production costs".
For Otero Monsegur, infrastructure is another area with the capacity to seduce international capital. "We see opportunities in the development of 5G technology and the deployment of private networks, and also in everything related to logistics infrastructure, because the bottlenecks that are coming in this field will end up generating opportunities for foreign investors," said the Towerco partner.
Parallel realities
When analyzing the relationship between startups and large investment funds in the region, Hernán Kazah, co-founder and managing partner at Kaszek Ventures, pointed out that most of the capital received by startups comes from abroad. "The market where the capital venture business is most developed is the United States. The first place where they invest is also the United States, and then they tend to focus on Asia. But as the phenomenon of technological disruption occurs globally, they are starting to look at other regions, including Latin America, and consider allocating between 3 and 7% of venture capital. There are also sovereign wealth funds from Asia that started to become more sophisticated recently and, with this "permanent capital" mentality, they started to copy strategies and professionalize the team", he explained.
Hernán Kazah: "Investments in technology cannot be totally divorced from the macroeconomic situation, but they are a little further away from the economic situation because they are less regulated sectors, where innovation usually wins over obstacles".
Likewise, the co-founder of Mercado Libre delved into the impact of the country context on business and clarified: "Investments in technology cannot be totally divorced from the macroeconomic situation, but they are a little further away from the economic situation because they are less regulated sectors, where innovation usually wins over obstacles, and they are encouraged to invest even though, as in Argentina until recently, there are more difficult situations for more traditional sectors".
For his part, Alexander Busse, CEO of NXTP Venture, highlighted the role of Argentine talent in the development of the software and technology industry. "Argentina has to contribute to technology, which is one of its competitive advantages, because of the incredible talent that the country has. The world is becoming more and more technological, so Argentine talent will be increasingly in demand," he explained.
Sofía Gutiérrez: "There is an incipient improvement in the number of real estate transactions, especially in the under US$200,000 segment, driven by the reappearance of mortgage loans".
Sofía Gutiérrez, Compass Group Investments, highlighted the potential of the real estate market. "There is an incipient improvement in the number of real estate transactions, especially in the under US$200,000 segment, driven by the reappearance of mortgage credit. In addition, we continue to see great opportunities in the purchase of used properties and land. Used properties because they continue to be priced below replacement cost. And land, because it is the last to react to a recovery. Developers usually have stock and when the market starts to reactivate, the first projects concentrate on the land they already have and only in a second stage they start looking for new ones", explained the specialist.
Martín Otero Monsegur: "We invest in private equity, that is, we buy cheap to sell more expensive. Therefore, the business is to buy now".
High visibility
The prevailing feeling among the funds is that the change of government implies a new opportunity for the country. "This foundational meeting comes at the optimal time. On the one hand, our country is entering a new political-economic cycle and paradigm. On the other hand, the world is going through profound geopolitical changes that generate great opportunities for entrepreneurial talent, investment power and Argentine intellectual capital", says Ramiro Juliá, CEO of Americas Capital Investments and one of the founders of the meeting.
Ramiro Juliá: "The world is going through profound geopolitical changes that generate great opportunities for entrepreneurial talent, investment power and Argentine intellectual capital".
The partners and executives of the large funds are also aware of the challenge involved in convincing international investors that this time the change is serious. "Milei's visit to Silicon Valley gave the country great visibility among investors and now we have to take advantage of that opportunity to think of specific products that can attract investments," explained Peire.
Source: LA NACION