The Project consists of an Equity Investment up to US$10 million as a limited partner in Stratus Capital Partners III. The Fund is the third fund with a middle-market strategy managed by Stratus Corporation through its Brazilian subsidiary Stratus Gestão de Carteiras Ltda. (the “Fund Manager” or “Stratus”), to invest in companies already operating in Brazil or with business plans to expand its operations to Brazil. The IDB Invest’s participation is expected to play a key role in attracting additional international investors and sending a strong signal from an institution with significant exposure and experience in the region and will allow the Fund to reach the necessary scale to effectively execute its investment strategy and reach its size of US$200 million. SCP III is a multi-sector fund that will invest capital in middle market companies with business plans combining both organic growth and add-on acquisitions. The Fund will diversify its portfolio of investments in sectors such as: (a) healthcare services; (b) education; (c) processed food; (d) logistics; (e) specialty services; (f) business services; (g) consumer services; (h) marketing and commerce distribution (retail and/or wholesale, etc.).
The IDB Invest’s involvement is instrumental for the coexistence of local players in a highly dynamic market with very well-known international players. Furthermore, the IDB Invest’s participation in the Fund would benefit a segment of small and medium-sized enterprises that has been relatively underserved by the main private equity funds in Brazil. Stratus is making an effort to identify investments in regions and cities outside Brazil’s metropolitan areas, as well as to engage businesses that may encompass a regional perspective and/or a broad international expansion.
Furthermore, IDB Invest’s investment will increase availability of private equity for growth-oriented, mid-market companies in Brazil, contributing to increased competitiveness and economic growth in the country. Such availability will come to add a better balance in today’s market inefficiency, helping to remove restrictions from the country / regional entrepreneurial ecosystem. The Fund will acquire equity positions with defined exit strategies, with investment tickets between US$10 million and US$50 million in companies that are generating revenues in the range of US$30 million to US$200 million.