Batista tries to maintain his X factor
"CASH IS NO longer king," says Eike Batista, the Brazilian billionaire and chairman of the EBX group of companies. "No, cash is no longer king. Cash is God. In these market conditions, those with cash are going to be the winners."
Batista wants more. He plans to tap into the new big trend in Brazil and raise a $5 billion to $10 billion private equity fund. He will start the roadshow in April (see Batista tries to maintain his X factor).
But the question of who will invest in this risk-averse climate remains. "Risk is the probability of getting paid – therefore an investment in a resort in Nicaragua with good management and offshore collateral is probably less risky than giving a US company a rolling facility," says Hans Humes, president of Greylock Capital Management, an asset management group in New York. "Risk has been redefined."
Despite a deep global recession, Brazil is still forecast to show GDP growth of 0.8% to 2% in 2009. And although the capital markets are only open to state-supported entities, there is still some hope.
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| "The deleveraging process was small and is now complete in Brazil and so I think investors will start coming into private equity funds soon"
Luiz Fernando Figueiredo, Maua Investimentos |
"I think the markets will recover here more through mergers and acquisitions, as companies are snapped up by private equity groups and opportunists, rather than by a sudden return of the capital or IPO markets," says Luiz Fernando Figueiredo, founding partner of Maua Investimentos, a hedge fund.