SinoLatin Capital
Encyclopedia
SinoLatin Capital is a Shanghai based-merchant bank specializing in financial advisory, private equity and research focused exclusively on cross border transactions between China and Latin America. The firm provides advisory services related to mergers and acquisitions
, corporate restructurings and financings. Additionally, the firm manages a pool capital for future private equity
investments.
SinoLatin Capital focuses on sectors of strategic importance to Chinese investors, such as oil and gas, mining, agribusiness and forestry. Latin America
is a natural resource rich region that produces vast amounts of these commodities, much of which is now being exported to China. Highlighting this growing trend, in 2009 China became Brazil's largest trading partner and has growing trade relationships with many countries of the region.
The firm also produces research on the fundamentals for Sino-Latin trade and provides a thought leadership framework for why the world should expect an increase in foreign direct investment
by Chinese companies into Latin America.
The firm was founded in 2009.
instituted its Go Global
strategy to encourage its enterprises to invest overseas as China has amassed huge amounts of foreign reserves. In November 2008, the Chinese government unveiled its policy paper on “Latin America and the Caribbean” which was a call to both sides to increase the dialog and person to person exchanges at every level. At the same time, there has been an increase in the frequency of visits by high level Chinese delegations to Latin America and trade agreements signed which lay the groundwork to bridge these two complementary regions together.
Like Africa and Australia before it, Latin America is beginning to become of strategic importance as China continues its efforts to secure a long term supply of commodities to grow its GDP. For example, agriculture in China
faces the limitations of having 10% of the world's total arable land support 20% of the world's population, requiring the country to seek secure sources of external food supplies. Additionally, urbanization in China
will necessitate that China continue to make large scale strategic investments, whether they be majority or minority stakes in private or public corporations or greenfield projects in the commodities arena. Latin America is a logical place to source commodities like iron ore, copper
and soy and recent deal activity highlight this trend. Beyond commodities, China can benefit from an increase in commercial ties in the areas of banking, tourism, manufacturing and infrastructure investments.
Mr. Bethel previously worked at ChinaVest, the oldest private equity fund
in Mainland China and in the Latin American mergers and acquisitions, corporate finance and private equity groups at Morgan Stanley
, J.P. Morgan Partners, Emerging Markets Partnership, and Compass Point Capital Partners.
Mr. Cobo co-founded Sinolatin Capital and served as CEO of Los Olivos Alimentos, a leading Mexican agribusiness firm. He has wide experience in making private investments and participating in several enterprises, including Los Olivos Alimentos, Saeta Continental, Figo Transport, Empacadora Zan Alfonso, Nueva Tecnología en Alimentación (Nutec), and Ganaderos Productores de Leche Pura (Alpura
).
Mr. Mingramm co-founded SinoLatin Capital and worked at ChinaVest, as a consultant for ProVentures, a financial advisory firm based in New York and advised The Synergos Institute on sustainable development initiatives along the U.S.- Mexico Border. On January 2011, Mingramm left SLC to pursue other ventures.
On May, 2009 Jorge Barreda joined as partner of Sinolatin Capital. Previously he was heading the Andean Region effort at UBS Investment Bank, where he was an Executive Director. Prior to UBS, he was a Vice President at Deutsche Bank where he originated capital markets, structured notes and derivatives transactions.
The firm has also befitted from the financial crisis of 2008, as it has allowed boutique investment banking
firms such as SinoLatin Capital to hire top talent from bulge bracket investment banks that had been heavily impacted in the crisis.
and Apax Partners
. To date, SinoLatin Capital is also the only Latin America-focused firm that has been approved to manage private equity funds in China.
Mergers and acquisitions
Mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or...
, corporate restructurings and financings. Additionally, the firm manages a pool capital for future private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
investments.
SinoLatin Capital focuses on sectors of strategic importance to Chinese investors, such as oil and gas, mining, agribusiness and forestry. Latin America
Latin America
Latin America is a region of the Americas where Romance languages – particularly Spanish and Portuguese, and variably French – are primarily spoken. Latin America has an area of approximately 21,069,500 km² , almost 3.9% of the Earth's surface or 14.1% of its land surface area...
is a natural resource rich region that produces vast amounts of these commodities, much of which is now being exported to China. Highlighting this growing trend, in 2009 China became Brazil's largest trading partner and has growing trade relationships with many countries of the region.
The firm also produces research on the fundamentals for Sino-Latin trade and provides a thought leadership framework for why the world should expect an increase in foreign direct investment
Foreign direct investment
Foreign direct investment or foreign investment refers to the net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor.. It is the sum of equity capital,other long-term capital, and short-term capital as shown in...
by Chinese companies into Latin America.
The firm was founded in 2009.
Background
The People's Republic of ChinaPeople's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
instituted its Go Global
Go global
Go Out policy is the People's Republic of China's current strategy to encourage its enterprises to invest overseas.Most nations favour actively attracting inward foreign investment, and would only support outward foreign investment passively...
strategy to encourage its enterprises to invest overseas as China has amassed huge amounts of foreign reserves. In November 2008, the Chinese government unveiled its policy paper on “Latin America and the Caribbean” which was a call to both sides to increase the dialog and person to person exchanges at every level. At the same time, there has been an increase in the frequency of visits by high level Chinese delegations to Latin America and trade agreements signed which lay the groundwork to bridge these two complementary regions together.
Like Africa and Australia before it, Latin America is beginning to become of strategic importance as China continues its efforts to secure a long term supply of commodities to grow its GDP. For example, agriculture in China
Agriculture in China
Agriculture is an important economic sector of China, employing over 300 million farmers. China ranks first in worldwide farm output, primarily producing rice, wheat, potatoes, sorghum, peanuts, tea, millet, barley, cotton, oilseed, pork, and fish.-History:...
faces the limitations of having 10% of the world's total arable land support 20% of the world's population, requiring the country to seek secure sources of external food supplies. Additionally, urbanization in China
Urbanization in China
Urbanization in the People's Republic of China increased in speed following the initiation of the reform and opening policy. By the end of 2010, the mainland of the People's Republic of China had a total urban population of 665.57 million or 49.68 percent of the total population.The rural-to-urban...
will necessitate that China continue to make large scale strategic investments, whether they be majority or minority stakes in private or public corporations or greenfield projects in the commodities arena. Latin America is a logical place to source commodities like iron ore, copper
Copper
Copper is a chemical element with the symbol Cu and atomic number 29. It is a ductile metal with very high thermal and electrical conductivity. Pure copper is soft and malleable; an exposed surface has a reddish-orange tarnish...
and soy and recent deal activity highlight this trend. Beyond commodities, China can benefit from an increase in commercial ties in the areas of banking, tourism, manufacturing and infrastructure investments.
History
SinoLatin Capital was founded by three partners, senior investment banker and current CEO Erik Bethel, entrepreneur and current Chairman Luis Gomez Cobo and founding partner Rafael Valdez Mingramm.Mr. Bethel previously worked at ChinaVest, the oldest private equity fund
Private equity fund
A private equity fund is a collective investment scheme used for making investments in various equity securities according to one of the investment strategies associated with private equity....
in Mainland China and in the Latin American mergers and acquisitions, corporate finance and private equity groups at Morgan Stanley
Morgan Stanley
Morgan Stanley is a global financial services firm headquartered in New York City serving a diversified group of corporations, governments, financial institutions, and individuals. Morgan Stanley also operates in 36 countries around the world, with over 600 offices and a workforce of over 60,000....
, J.P. Morgan Partners, Emerging Markets Partnership, and Compass Point Capital Partners.
Mr. Cobo co-founded Sinolatin Capital and served as CEO of Los Olivos Alimentos, a leading Mexican agribusiness firm. He has wide experience in making private investments and participating in several enterprises, including Los Olivos Alimentos, Saeta Continental, Figo Transport, Empacadora Zan Alfonso, Nueva Tecnología en Alimentación (Nutec), and Ganaderos Productores de Leche Pura (Alpura
Alpura (company)
Alpura is a Mexican dairy products company based in Mexico City, with milk producers from Hidalgo, Tlaxcala, Puebla and Guanajuato. It was founded in 1972. Currently, Alpura's products are sold in 27 states in Mexico and exported to the United States. Alpura produces 3 million liters and it offers...
).
Mr. Mingramm co-founded SinoLatin Capital and worked at ChinaVest, as a consultant for ProVentures, a financial advisory firm based in New York and advised The Synergos Institute on sustainable development initiatives along the U.S.- Mexico Border. On January 2011, Mingramm left SLC to pursue other ventures.
On May, 2009 Jorge Barreda joined as partner of Sinolatin Capital. Previously he was heading the Andean Region effort at UBS Investment Bank, where he was an Executive Director. Prior to UBS, he was a Vice President at Deutsche Bank where he originated capital markets, structured notes and derivatives transactions.
The firm has also befitted from the financial crisis of 2008, as it has allowed boutique investment banking
Investment banking
An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities...
firms such as SinoLatin Capital to hire top talent from bulge bracket investment banks that had been heavily impacted in the crisis.
Private Equity
As of March 2010, SinoLatin Capital’s subsidiary in China will be a “Private Equity Investment Management Company,” or, in Chinese, 股权投资管理（上海）有限公司. The license allows SinoLatin Capital to raise and manage private equity funds denominated in Chinese RMB. SinoLatin Capital is one of a first foreign financial institutions to be granted the license in China. It now joins a very small group foreign private equity firms with this status, including The Carlyle Group, Blackstone GroupBlackstone Group
The Blackstone Group L.P. is an American-based alternative asset management and financial services company that specializes in private equity, real estate, and credit and marketable alternative investment strategies, as well as financial advisory services, such as mergers and acquisitions ,...
and Apax Partners
Apax Partners
Apax Partners LLP is a global private equity and venture capital firm, headquartered in London. The company also operates out of eight other offices in New York, Hong Kong, Mumbai, Tel-Aviv, Madrid, Stockholm, Milan and Munich. The firm, including its various predecessors, have raised...
. To date, SinoLatin Capital is also the only Latin America-focused firm that has been approved to manage private equity funds in China.
Recent examples of Chinese Outbound Investment in Latin America
The following is a list of notable acquisitions and investments performed by Chinese companies in the area of commodities in Latin America:- March 2010: East China Mineral Exploration and Development Bureau (ECE) is expected to acquire an iron ore mine in Brazil;
- December 2009: Wuhan Iron & Steel agreed to pay $400 million for a minority state of Brazil's mining company, MMX, under the EBX Group;
- December 2009: Shunde Rixin Development Company acquires 70 percent stake in an iron ore mine in Chile;
- December 2009: China Railway Construction Corp. Ltd. and Tongling Nonferrous Metals Group Holdings Co. offered to buy Corriente Resources Inc. for US$649 million;