Emerging markets have been commonly explored in recent years and the on-going financial turbulence in the developed world will continue to act as a catalyst for investors to look further afield.While there are significant macroeconomic trends that make emerging markets attractive destinations for private equity funds – elevated economic growth rates, higher expected returns and diversification benefits - substantial risks remain.

The financial crisis has taught us all just how closely investments are tied with politics and economics and investing in emerging markets is a very complicated process; the financial world moves extremely quickly and it’s essential to have the best and latest financial information to make well-informed decisions about risk and return. Acquisition International speaks to Giuseppe Uslenghi, Director and Chairman of the Board of Teak Ventures do Brasil SA (TVB)“Teak Ventures do Brazil S.A. (TVB) is a privately-held investment company based in Curitiba, PR, Brazil. Established in 2008, TVB has three active investments, an international management team, and a solid growth strategy and approach.

TVB brings an in depth knowledge of the Brazilian market, gained in over 20 years of entrepreneurial involvement in a number sectors, combined with a solid international management experience in a large number of industries and functional areas.

“TVB currently has three active investments:
• 8 % of a Plastic Products Company established in 1979
• 80% of a Real Estate Development Company established in 2011.
• 25% of a Teak Plantation Company established in 1999”What skill set required to successfully invest, close deals and sell a business in an emerging market? • “Deep knowledge and understanding of local culture, possibly with local structure
• Knowledge of country economy
• Strong international perspective and approach
• Availability to be involved in managing the invested companies
• Deep expertise in several industries
• Broad functional expertise: from strategy to marketing to operations
• Solid problem solving attitude
• Strong people/team management focus
• Risk management
• Financial modeling

”Which emerging markets are you currently active in? How did you weight up risk against the rewards?

“We focus on Brazil, exclusively. We mitigate our risks by focusing on investments in companies that target the Brazilian domestic market, and in particular those that address the demands of the growing Brazilian middle class, and we do not invest in companies that have a high percentage of their sales driven by exports (unless these exports are driven to satisfy the needs of the growing middle class of other emerging economies)”

Which sectors are currently most active in your emerging market/s?

“Our main current investments are in the Plastic Products, Construction, and Forestry industries, but we are carrying on active scouting and research in several other sectors, including Retail, Transportation, Computer and electronics, Information technology and ecommerce, Infrastructure etc.”

Which sectors are seeing the most activity in your emerging market? Do you have any plans to enter these sectors in 2012, if not already?

“We see as most active sector those that address the demands of the growing Brazilian middle class, and, in particular:
• Real estate development
• Retail
• Transportation
• Computer and electronics
• Information technology and ecommerce
• Infrastructure

We have recently entered the Real Estate development industry, and we are currently assessing opportunities in the other sectors above”

Have there been any notable deals (size, complexity, duration, etc.) that you’ve been involved in recently?

“Within the last two years, we took part in the investment in Pisani Plasticos that assumed the control of that company. Total investment size was approximately USD 15 Million. We have recently acquired a control share in a construction company, a deal worth about USD 8 million” 

What levels and patterns of activity do you foresee over the next 12 months?

“We are working at a number of initiatives including consolidation of our existing investment portfolio, and particularly at the development of the construction company, and at the same time planning and negotiating our exits, raising more funds to expand TVB’s investment porfolio, the migration of or company into an investment fund structure”

On a lighter note, what is the best piece of advice ever given to you? 

I would say to know very well the companies that you invest in, and to proceed one step at the time.

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