This document outlines favorable economic conditions and investment opportunities in Colombia that make it an attractive market for private equity funds. It notes that Colombia has experienced strong GDP growth and declining unemployment in recent years. Private equity in Colombia has seen significant growth, with capital commitments increasing at an annual rate of 71% between 2005-2012. The country has a supportive regulatory environment for private equity funds and large pools of local capital from pension funds that can invest in these funds. A variety of sectors across Colombia's diversified economy represent opportunities for private equity investment and growth.

1. INVEST IN PRIVATE
EQUITY FUNDS
FAVORABLE
ECONOMIC
CONDITIONS
• Macroeconomic stability and strong economic performance in the
long run. Colombian economy grew 6.6% in 2011 and 4% in 2012.
• Controlled inflation under the target. In 2012, inflation closed at
2.4%.
• Reduction of the unemployment rate. In December 2012,
unemployment rate was 9.6%, accumulating 5 consecutive months
with a rate of one digit.
• In 2013, estimated population is about 47 million inhabitants.
Colombia has a growing middle class, which in 2012 was 25% of the
total population.
• GDP per capita higher than US$10,000, almost twice the amount
recorded in 2000.
Controlled inflation
under the target
GDP growth 2012
Investment rate as a
percentage GDP
• 20.5 million people (66.5% of the adult population) have at least one
financial product; and the credit card users reached 5.9 million in
September 2012, 7.4 % more than in the same period of 2011.
• Domestic investment rate was close to 30% (as a share of GDP).
L ib erta
y O rd e n

2. POTENTIAL
GROWTH OF THE EQUITY
FUNDS INDUSTRY
01
In 2012, Colombia maintained its fourth
place among 12 Latin American and
Caribbean countries in the 2012 LAVCA
Scorecard on the Private Equity and Venture
Capital Environment, which measures
favorable conditions for development of
the PEF industry.
how the country evolved
02 It is remarkableto move from the position
in the ranking,
of capital
06 28% multi-sector
in
commitments are
funds, 26% in
infrastructure funds, 22% in realestate funds and 10% in oil and gas
sector funds.
08 16 internationalingeneral partners
have presence Colombia, from
which 7 have local investment
funds.
also offer investment
07 Other sectorsfor private equity funds:
opportunities
3,320
energy, tourism, health care, forestry,
agribusiness, and ITCs.
2,691
2,414
Colombia accounts 1% of fundraising in
Latin America.
04
According to Bancoldex, there are 32
closed funds with capital commitments
of more than US$3.4 billion. There are
also 15 fund raising initiatives with a US$
828 million target.
capital commitments have
05 Thecompounded annual growthregistered
a
of 71%
Source: Bancoldex - Department
Capital Funds.
3,731
7 in 2007 to 4 in 2012.
03
CAPITAL COMMITMENTS
US$ MILLIONS, 2005-2013.
1,473
980
429
79
79
2005
2006
between 2005 and 2012.
2007
2008
2009
2010
2011
2012
2013

3. Strong Regulatory and
Institutional Framework
• According to LAVCA, one of
Colombia’s strengths is its
attractive regulatory framework
to the establishment and
management of private capital
funds.
• With the Decree 2175 of June
2007 (now contained in Part 3
of Decree 2555 of July 2010),
interest in private equity funds
has notably increased in the
country.
• Colombia has made greater
progress in order to improve
its business environment, and
actually ranks 45 among 185
economies, according to the
Doing Business 2013 report.
• In 2009, the Bancoldex Capital Program was
created, in order to promote and develop the
private equity industry in Colombia.
• In July 2012, Bancoldex and the Multilateral
Investment Fund of the Inter-American
Development Bank, created the Colombian
Association of Capital Funds (COLCAPITAL),
in order to promote and strengthen the
private equity industry in Colombia.
• Colombia is also recognized for its investors
protection: is sixth in the world and first
among Latin American countries.

4. Availability of Local Equity
and Access to Equity Markets
There is an excellent opportunity to obtain local equity resources from institutional
investors like pension funds and insurance companies, which have had great returns in
the last few years.
In Colombia, there are 4 private pension funds (Protección, Porvenir, Colfondos and
Skandia) and about 30 insurance companies with investment capacity in capital funds.
Between January and November 2012, the value of obligatory pension funds reached
US$63.1 billion, about 23% of GDP. The funds value recorded a compounded annual
growth of 22% between 2005 and 2012.
In 2007, changes in regulations allowed to pension funds to invest in private equity
funds. Since 2011, with the multi-fund system, a moderate pension fund 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.
The integration of Colombian, Chilean, and Peruvian stock markets, become an
excellent exit strategy for private equity funds, with a greater diversification to
investors and access to the capital market.
Currently, MILA is the number one stock market in Latin America by the quantity of
companies listed, the second one in stock market capitalization and third by trading
volume.

5. MULTIPLE INVESTMENT OPPORTUNITIES
Agriculture, forestry,
and fishing 6.5%
Electricity, gas,
and water: 3.7%
Transport and
communications: 6.4%
Restaurants and hotels: 3.4%
Financial and business
services: 20.5%
Construction: 8.5%
Commerce: 9.0%
Social community and
personal services: 16.8%
COLOMBIA’S GDP BY SECTOR, 2012
GDP: US$343,645 MILLION*
Source: DANE.
Colombia has a diversified
economy with investment
opportunities in different sectors.
The service sector stands out,
followed by manufacturing, mining,
commerce, and construction.
*Calculations performed
on the value added.
Mining: 12.3%
Increasing foreign direct
investment flows confirm the
good time that the country has
to attract investment. In 2012,
the total amount of FDI grew
17.8%, mainly because of the
greater investment in business
and financial services (326%),
manufacturing (159%), electricity,
gas, and water (115%).
Manufacturing: 13.0%
Colombia has investment
opportunities for small and
medium sized enterprises in
expansion and consolidation
stages, which are mainly
concentrated in the commerce,
services, and industry sectors.
According to the National
Association of Financial
Institutions (ANIF), the investment
potential in those companies is
due to the availability of labor and
its contribution to growth. Micro,
small, and medium companies
make up 81% of the workforce and
contribute on average 40% of GDP.

6. PRIVATE EQUITY FUNDS
Brookfield is a company dedicated to management of real assets and private
equity funds. The Brookeld Colombia Infrastructure Fund is focused on making
infrastructure investments in Colombia in the energy, transportation, and public
services sectors.
Brilla Group: It is a private equity firm focused on the luxury beachfront hotel and
resort asset class. The portfolio includes the Brilla Colombia Private Equity Fund,
which has investment commitments from local pension funds and institutions,
and it will invest exclusively in the Colombian luxury beachfront hotel asset class.
Aureos Capital: It is the small and mid-cap private equity investment platform
of the Abraaj Capital Group. The portfolio includes Fondo Aureos Colombia FCP,
Aureos Latin America Fund I LP and Aureos Latin America Fund II LP, which seek
long-term capital appreciation by investing in companies in several sectors.