Burrill constitutes US$ 200 million fund in Brazil
Valor Econômico
The American Management Company, Burrill & Company, with more than US$ 1 billion in assets managed in the United States and other countries, including Asia, advances towards the raising of funds to form a US$ 200 million fund that will invest in innovative companies in the Brazilian market. Six institutions, besides the very company, have already committed to invest US$ 100 million in the Burrill Brasil I, Mutual Fund for Investment in Emerging Companies (FMIEE). The list includes the BNDES (National Development Fund), the Finep (State Studies and Projects Financing Agency), the Multilateral Investment Fund (MIF), of the IDB, Pfizer USA, Nossa Caixa Desenvolvimento and CAF.
Burrill is also in an advanced stage of negotiations with four investors, whose names are kept in secret, which may invest an additional US$ 100 million in the fund. The possibility of raising US$ 200 million has exceeded the initial expectations of the company that, in early 2010, worked with a number of US$ 100 million for the fund. "We had greater receptiveness on the part of the local investors", said João Paulo Poiares Baptista, Director of Burrill for Latin America. He said the fund will make two investments in companies in Brazil later this year.
The companies to be invested in earn up to R$ 150 million (US$ 93.8 million) a year and they operate in activities related to innovation, which Baptista calls "life sciences". The definition is broad and it includes companies specialized in the cure and treatment of human and animal health and in the development of technologies for biofuels and food products. The fund will invest in private companies, but it also may do it in others listed on the stock exchange. "In the portfolio there are companies whose earnings go from zero to R$ 80 million (US$ 50 million) a year", said Baptista.
The Brazilian Securities and Exchange Commission (CVM) informed the constitution of the Burrill fund was authorized in January 14, this year, but the registration form for the operation has not yet been submitted. That can happen until January 9, 2012. According to the independent governmental agency, the FMIEE follows a ruling system that differs from that of an Equity Investment Fund (FIP). First, the CVM authorizes the establishment of the fund and only after the subscription of all shares representing the initial assets is proven the independent governmental agency grants the registration for operation. Burrill hopes to obtain the registration of the fund in June.