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2012 South America Trade Mission: August 12-18, 2012

Santiago, Chile Lima, Peru Bogota, Colombia

Contact Jessica Tartell at +1 602-978-7501 or jessica.tartell@thunderbird.edu

U.S. Certified Trade Mission

The 2012 South America certified trade mission to Santiago, Chile, Lima, Peru, and Bogota, Colombia provides the opportunity for up to 10 U.S. based GPs to connect with South American institutional investors, sovereign funds, and family offices.

In cooperation with the U.S. Department of Commerce, the U.S. Embassies in Chile, Peru and Colombia, and the American Chamber of Commerce, Chile; the Thunderbird School of Global Management’s Private Equity Center invites you to apply to represent the United States private equity and venture capital industries as part of this exceptional trade mission.

The goal of the multi-country mission is to provide South American institutional investors with first-hand knowledge and face-to-face introductions to U.S. based alternate asset investment representatives.

The Trade Mission is a highly interactive, informative, intensive program designed to provide U.S. private equity and venture capital fund managers the opportunity to build key business relationships with LPs in Chile, Peru and Colombia.

The 2012 South America Private Equity and Venture Capital Certified Trade Mission is focused on the following objectives:

Introduce U.S. private equity firms to LPs who have the ability to invest in U.S. private equity firms.
Create opportunities for intimate interactions between U.S. GPs and foreign LPs.
Promote U.S. private equity firms.
Introduce South American venture and private equity firms, entrepreneurs, and business and government leaders to U.S. private equity fund managers.

Audience Profile
Invited South American LPs include top-tier institutional investors, high net-worth individuals; single and multi-family offices, sovereign funds, and pension funds that either have an exposure to U.S. private equity and venture capital fund investments or have potential interest in doing so in the future. The 2012 U.S./South America Trade Mission will enable our delegates to engage in intimate and one-on-one dialogue with South American investors to explore opportunities for investment.

GP Selection Criteria
In order to ensure the most successful outcomes possible, Thunderbird’s Global Private Equity Center will be selecting GP participants based on criteria meant to showcase the U.S. private equity and venture capital industry. GPs who best match the investment interests of South American LPs include:

Ability and interest in engaging with LPs to build long-term relationships;
Unique perspectives that selected private equity firms will contribute to a well-balanced mix of delegation participants; and
Interest in participating in panel discussions and roundtable sessions.

The government of the United States and the Department of Commerce is not involved in selecting or recruiting GPs for this mission. Such selection and recruitment is reserved for Thunderbird School of Global Management’s Private Equity Center.

Draft Itinerary

Santiago, Chile
Economic Briefing by U.S. Embassy with AmCham Chile
U.S. Chile Venture Development Forum
GP Introductions/Panels
Roundtable Discussions on Venture Capital and Private Equity
Reception for U.S. and Chilean Participants

Lima, Peru
Economic Briefing by U.S. Embassy Peru
U.S. Peru Venture Development Forum
Reception for U.S. and Peruvian Participants
GP Introductions/Panels
Roundtable Discussion on Venture Capital and Private Equity

Bogota, Colombia
Economic Briefing by U.S. Embassy
U.S. Chile Venture Development Forum
GP Introductions/Panels
Roundtable Discussion on Venture Capital and Private Equity
Reception for U.S. and Colombian Participants

For more information about participation in the Trade Mission please contact:

Jessica Tartell, Trade Mission Director
Thunderbird Private Equity Center
jessica.tartell@thunderbird.edu
+1 646-770-6414

+1 602-978-7501

REGISTRATION
Trade Mission registration is limited to 10 select private equity and venture capital firms. The quantity of GP participation is strategically limited in order to maximize the level of overall access and one-on-one meeting opportunities with foreign institutional investor attendees. As space is limited, we encourage you to apply promptly.

Included in the certified trade mission fee:

Airfare from Santiago, Chile to Lima, Peru to Bogota, Colombia
Deluxe accommodations at The Ritz Carlton in Santiago; Swiss Hotel in Lima; and The Hilton in Bogota
All meals during the trade mission
Ground transfers to and from each airport and venue
Hand delivery of GP marketing materials to Chilean, Peruvian and Colombian LPs
Dedicated Thunderbird team on trip
Hotel incidentals, room service, and personal alcohol is not covered by the fee
A non-refundable deposit is required by January 31, 2012 to register

Payment may be made by check, credit card or wire transfer.

Snapshot: Chile

With a population of 17.2 million people, Chile is the sixth largest country in South America.
Chile is one of the most prosperous and economically stable countries in Latin America and has GDP of US$203.44bn.
The country has the highest credit rating of any country in Latin America, having recently been upgraded to A+ (Fitch) and A1 (Moody's). The outlook on Chile remains positive.
Chile has boasted one of the most free market economies in the world for over two decades. Strong fiscal policies allowed the country to remain solvent and stable during the global financial crisis of 2008.
In 2011 Chile became the first South American country to be granted OECD membership.

Notable Strengths of Chile:

Prudent fiscal policy
Strong and stable democracy, center – right
Ease of doing business
Strong intellectual property protection, judicial transparency, and low corruption.

Family Offices
Chile has a well-developed business class including regional and global leaders in such areas as retail, banking, mining, real estate, agriculture, and forestry to mention a few key sectors. Large fortunes have been built over the last three decades taking advantage of the country’s relatively high growth rates and accelerated global integration.

A business-friendly political environment has supported the process and a growing capital market underpinned by private pension fund and insurance investors. Increasingly these families are choosing to cash out a portion of their businesses through IPOs, strategic partnerships or outright sales to international strategic investors. As a result, the large family groups have established family offices to manage their liquidity.

Professional management who is seeking to build and to diversify an investment portfolio generally runs these offices. Several have begun investing in private equity and venture capital (estimated less than US$200 million to date). Experience has shown them the importance of a view beyond Chile’s national borders and in partnering with individuals/firms that have a proven track record.

Private Pension Funds
Chile’s private pension system is an internationally recognized success story. Today, Chile’s six private investment funds (Provida, Habitat, Cuprum, Plan Vital, Capital and Modelo) manage US$140 billion with approximately 45% invested internationally.

The growth in assets under management and the need to diversify means continued growth in the amount and percentage of assets invested overseas. Early experiences with venture capital investments on a small scale in the late 1990s were negatively impacted by a lack of track record of the fund managers. More recently, Chilean pension funds have invested in internationally known private equity funds with significant track records (i.e., over US$200 million invested in Blackstone, among others). Venture capital is an asset class that is ‘on the radar’ for these fund managers who will be curious to know the latest thinking about opportunities in venture capital.

Private Insurance Companies
Chile has a robust and growing private insurance industry. The 20 key players include key international companies, as well as domestic firms. International insurance players have not invested in equities in Chile. The largest domestic firms including Consorcio Nacional de Seguros, Mas Vida and Bice Vida have important equity portfolios.

Each of these large domestic firms have well over US$1 billion in assets and have begun participating in alternative investments including private equity and venture capital.

Historical Context
Chile's historical economic prosperity has been tied to the fact that the country is the world's largest producer and exporter of copper and lithium. Additionally it actively exports fruit, fish products, paper and pulp, chemicals, services and wine. Chile's main trading partners are the U.S., China, Argentina, Brazil, and South Korea. Chile claims to have more bilateral or regional trade agreements than any other country. It has 57 such agreements (not all of them full free trade agreements), including with the European Union, China, India, Mercosur, Mexico, South Korea, and the U.S.

Political Context
Military dictator, General Augusto Pinochet, governed Chile from 1973 to 1990. Under Pinochet, the country enacted numerous far-reaching economic and social reforms that transformed the country's state-oriented economy into one of the most open economic systems in the developing world. Since the return to democracy, Chileans remain committed to open and free political and economic systems.

In 2010, Michelle Bachelet handed the presidency over to Sebastián Piñera, who won with a 52% victory, becoming the first democratically elected right-wing president in over fifty years. He has pledged to create a million jobs and double Chile’s per-capita income by expanding the country’s growth rate.

Snapshot: Peru

Peru is the fourth largest country in South America with a population of 29.5 million people.
With a GDP of US$153.84bn, Peru is the 42nd largest economy in the world.
As of 2011, Peru’s economy is one of the world's fastest-growing economies owing to their economic boom during the 2000s.
In November 2011, Peru's credit rating was raised to BBB (Fitch), with a stable outlook.

Notable Strengths of Peru

Macroeconomic stability
Prudent fiscal spending and fiscal surpluses
High international reserve accumulation
External debt reduction
Achievement of investment grade status

Pension Funds
Currently, Peru's private pension fund companies, known as AFPs, are legally able to invest 30% of their portfolios internationally. However, a bill currently in Congress proposes raising the foreign investment cap to 50%. Peru's AFPs have $30 billion assets under management, equal to 20% of the gross domestic product of the country's surging economy. The top private pension funds, family offices and private insurance companies will be invited to meet U.S. GPs.

Historical Context
Historically, the country's economic performance has been tied to its exports. Peru's main exports are copper, gold, zinc, lead, oil, textiles, chemicals, pharmaceuticals, machinery, services and fish meal; its major trade partners are the United States, China, Brazil, European Union and Chile.
Peru has had periods of military rule but in recent decades its governments have been democratically elected and its leaders held to account for their actions. Alberto Fujimori, who was president from 1990 to 2000, is currently serving an extended prison sentence for human rights abuses.

Political Context
Ollanta Humala, a career army officer, won the June 2011 presidential election after promising to respect democracy and spread the benefits of a decade-long economic boom to the poor. He promises Peru's poor a greater share of the country's considerable mineral wealth and pledged to honor the free market but put Peruvians first. Financial markets initially dropped after Humala's election on fears he would ruin the economy however markets have since stabilized, and investors remain cautiously optimistic.

Snapshot: Colombia

Third most populous country in Latin America with 47 million people.
Real GDP is expected to grow by 4.5% in 2012, and expected to increase to 4.8% in 2013.
Major exports include metals and oil – Colombia is third largest oil exporter to the US.
Colombian bond ratings improved to investment grade in March 2011, to BBB+ (S&P).
New institutional investment laws passed in August, 2010, relaxing restrictions on foreign investment funds. Pension funds and life insurance companies may invest 5% in PE/VC and mandatory pension funds may invest up to 5% - 7% in PE/VC.

Notable Strengths of Colombia

Stable, center-right politically
Free trade agreement with United States to be implemented in 2012
New oil and gas investments and discoveries
Strong progressive laws on fund formation – institutional investment

Family Offices
Colombian family offices include such prestigious offices as Familia Escarpeta, Friko S.A., Familia Robayo, and Familia Santo Domingo. These families have interests in a range of industries including mining, oil, and other natural resources.

Pension Funds
The number of pension funds has grown rapidly recently and include such groups as Grupo Suramericana, Provenir, Proteccion, Colfondos and BBVA- Horizante. The top pension funds will be invited to the program. Limits on allowable equity holdings (40%) for pension funds has fueled interest in private equity of late.

Insurance Companies
Top Colombian insurance companies include Seguros Colpatria S.A., Liberty Seguros S.A., Mapfire Seguros, BBVA Seguros, Royal and Sun Alliance Seguros.

Historical Context
Colombia is most notably known for its coffee and oil exports in addition to the drug trade that was active in the 1990s. The conflicts with rebel groups has decreased dramatically during the last decade with the assistance of counter narcotics operations partly funded by the U.S. Between 2002 and 2008, Colombia experienced a significant decreases in crime and rebel activity. The country continues to make large strides in security, economic stability, and export growth. Recently, a free trade agreement was signed with the United States, which will be implemented in 2012.

Political Context
Recently elected President Juan Manuel Santos, of the center-right party (Partido Social de Unidad Nacional), has continued where former President Alvaro Uribe left off by taking a hard stance on rebel activity, and implementing important fiscal reforms. Colombia enjoys a stable government and constitution, and has significantly reduced the drug-trafficking it was once known for. President Santos continues to enjoy broad support, as he has sustained continued economic growth by focusing on macroeconomic stability, improving the business climate, and attracting foreign investment.