Private equity funds sector 2016

1. Libe rtad y O rde n
PRIVATE EQUITY
FUNDS

2. POTENTIAL GROWTH OF THE PRIVATE EQUITY INDUSTRY
In 2015 Colombia maintained its 4th
place position among 12 Latin American
and Caribbean nations, in the ranking
developed by the Latin American Private
Equity & Venture Capital Association
(LAVCA), which measures how favorable
conditions are for the development of the
private equity industry. Sectors like energy, tourism, health,
forestry, agro-industry and ICTs, among
others, offer investment opportunities.
SOURCE: BANCOLDEX – PRIVATE
EQUITY FUNDS DEPARTMENT.
industry in Colombia has allowed it to
move up in the LAVCA ranking: it was
in 7th place in 2006, and it has held 4th
place since 2010.
In 2014 Colombia accounted for 1% of
the total resources collected in private
equity and venture capital funds in Latin
America, which in turn accounts for 5%
at a global level.
28% of committed capital is in multi-
sectoral funds, 27% in real estate funds,
19% in infrastructure funds and 8% in
funds for the oil and gas sector.
COMMITTED CAPITAL IN
USD MILLIONS, 2005-2014.
According to Bancoldex [Banco de Comercio
Exterior (Foreign Trade Bank)], there are 46
fundmanagersand61funds,thenumberhas
grown at a compound annual rate of 40.6%
and44,5%between2005and2014.
US$3,2 billion have been invested in 421
companies or projects and more than
US$4.200 million in committed capital for
investments in the comingyears.
2013
34
1.378
34
594
1.905
2.954
3.246
3.872
4.070
2005 2006 2007 2008 2009 2010 2011 2012
4.399
2014

3. FAVORABLE
ECONOMIC CONDITIONS
Inflation, controlled
and under its goal
GDP growth, 2014 Internal investment
rate as a percentage
of GDP
Macroeconomic stability and dynamic long-term economic
Inflation is controlled and under its goal. In 2014 inflation
closed at 3,6%.
Per capita GDP above USD $10,000, almost twice what was
recorded for the year 2000.
Internal investment rate close to 30% (as a percentage of
GDP).
3,6% 4,6% 30%
performance. The Colombian economy grew by 4,6 in 2014 and
was estimated to grow by 3,0% in 2015.
Estimated population of 48 million in 2014 and a growing
middle class that is expected in 2020 is 37% of the population.
The banking index, measured as the number of adults that
have at least one financial product, has grown at rates of greater
than 6% over the last three years.
Reduction in the unemployment rate. The average unemploy-
ment rate in 2015 was 8,9%.

4. According to LAVCA, one of Colombia’s strengths is its
attractive regulatory framework for the creation and
management of private equity funds.
Since 2007, Colombia’s regulations have generated
interest among investment funds and have facilitated
and boosted the private equity industry. Decree 1242 of
2013 replaces the previous regulations in regard to the
administration and management of investment funds.
protection it offers investors, ranked 6th in the world
and 1st among Latin American countries, according to
Doing Business.
In2012BancoldexandtheInter-AmericanDevelopment
Bank’s Multilateral Investment Fund (MIF) led the
creation of the Asociación Colombiana de Fondos
de Capital [Colombian Association of Private Equity
Funds] (COLCAPITAL) to strengthen and promote
development of the private equity industry.
In 2009 the Bancoldex Capital program was created
with the aim of promoting the private equity industry
in Colombia.
CONSOLIDATED REGULATORY
AND INSTITUTIONAL FRAMEWORK
No restrictions on local institutional investors to invest in
private equity, besides there is protection of minority
shareholder rights.

5. investors such as pension funds and insurance companies, which have had an excellent
performance in recent years.
Currently there are 4 private pension funds (Protección, Porvenir, Colfondos and Old
Mutual) and around 30 insurance companies with the capacity to invest in private equity
funds.
The financial and insurance sector is one of the sectors that most contributes to the growth
of the economy.
In 2007 changes in the regulations allowed pension funds to invest in private equity funds.
In 2011, with the implementation of the multi-fund system, smaller pension funds can
invest up to 5% in private equity funds and up to 7% if it is a high-risk fund.
Other important institutional investors are development banks, financial corporations and
multilateral investment funds.
exit strategy for private equity funds, with greater diversification for investors and better
access to capital markets. Greater market consolidation is expected to be achieved with the
entrance of the Mexican Stock Exchange.
Currently, the MILA [Mercado Integrado Latinoamericano (Latin American Integrated
Market)] is the top market in Latin America by number of companies listed, second in
market capitalization and third for volume of trade.
AVAILABILITY OF LOCAL CAPITAL
AND ACCESS TO CAPITAL MARKETS

6. MULTIPLE INVESTMENT OPPORTUNITIES
Colombia has a diversified economy with investment possibilities
construction sectors stand out in the country.
In Colombia there are investment opportunities in small and
medium companies in stages of expansion and consolidation,
which are mainly concentrated in the retail, services and
industry sectors.
Source: DANE.
According to the Asociación Nacional de Instituciones Financieras
[National Association of Financial Institutions] (ANIF), there is
potential for investment in these companies due to the availability
of labor and contribution towards growth. Along with micro-
enterprises, they account for 81% of the workforce and provide an
average of 40% of the GDP.
*Calculations made on added value.
SECTORAL DISTRIBUTION OF GDP 2013
GDP: USD 232.995 million*
3,8%
1
21,8%7.9%
8.0%
8.1%
12.3% 14.2%
6,8%
FINANCIAL ESTABLISHMENTS AND BUSINESS SERVICES
SOCIAL COMMUNAL AND PERSONAL SERVICES
COMMERCE, REPARATION, RESTAURANTS AND HOTELS
MANUFACTURING INDUSTRY
MINING
TRANSPORTATION AND COMMUNICATIONS
CONSTRUCTION
AGRICULTURE, FARMING, HUNTING, FORESTRY AND FISHING
ELECTRICITY, GAS AND WATER
For private equity funds have been identified investment opportu-
nities in the sectors of health, Software and IT, tourism infrastruc-
ture, agriculture, energy, infrastructure and innovation projects.

7. LARGE COMPANIES HAVE CHOSEN
COLOMBIA AS A PLACE TO INVEST
FCP, Aureos Latin America Fund I LP and Aureos Latin America Fund
II LP, which seek long-term capital appreciation via investment in
companies in different sectors.
AUREOS CAPITAL:
Company dedicated to the professional management of real assets
and private equity funds. Brookfield’s Colombia Private Equity and
Infrastructure Fund is focused on making infrastructure investments
in the energy, transportation and public services sectors.
BROOKFIELD:
includes the Brilla Colombia Private Equity Fund, which has resources
is to invest in luxury hotel assets on the Colombian Caribbean Sea.
BRILLA GROUP: