Private Equity and Venture Capital in Brazil - BVCA admin
Private Equity and Venture Capital in Brazil - BVCA admin
Private Equity and Venture Capital in Brazil - BVCA admin
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Currency/Inflation Issues<br />
• Currency movements<br />
– If fund contributions/distributions are measured <strong>in</strong><br />
dollars, but <strong>in</strong>vestments are <strong>in</strong> real-denom<strong>in</strong>ated<br />
assets:<br />
– Carried <strong>in</strong>terest is “supercharged” if the real appreciates<br />
– Possible loss of sponsor <strong>in</strong>centives if the real<br />
depreciates<br />
– Investors sometimes ask for the “waterfall” to be<br />
calculated <strong>in</strong> reais<br />
• IOF tax<br />
– Fund expense vs. <strong>in</strong>vestor expense<br />
• Inflation<br />
– Some funds adjust “hurdle” rate to reflect <strong>in</strong>flation rate<br />
23539783<br />
<strong>in</strong> <strong>Brazil</strong>
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