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Private Equity in Puerto Rico: Building an Ecosystem
Laura Cantero, Grupo Guayacán
Alex Borschow, Semillero Ventures
Asociación de Profesionales de Finanzas
January 25, 2017
What is Private Equity?
Private Equity (PE) is equity that is not
publicly listed or traded.
The PE industry consists of individuals and
firms that invest directly into private firms
or perform buyouts of public firms with
plans to take those firms private.
PE investments are less liquid than public
equities, have a longer investment
timeframe and may require greater levels
of engagement from investors.
Who invests in PE? • Institutional investors (pension funds, foundations, insurance co’s, endowments)
• High net worth individuals
Why invest in PE? • Strong match for long-term portfolios
• Historically strong returns
• Potential for high rates of return
• Diversification
• Phased capital deployment
How can you invest in PE? • Direct investments
• Fund investments
Investing in Private Equity
Capital for Every Stage
Risk Risk
Building a Private Equity Ecosystem
Essential Components
Deal Flow
(Quality/ Quantity)
Capital
(Institutions &
Individuals)
Investment Vehicles
(Funds)
People
(Management Talent)
Educated Investors
Policy Framework
GGI is a private sector driven nonprofit organization
founded in 1996 by Enrique Adsuar González with a unique
model that couples private equity investment with a series of
programs aimed at developing, strengthening, and
advancing Puerto Rico’s entrepreneurial ecosystem.
About Grupo Guayacán, Inc.
1. Advance Puerto Rico’s long-term sustainable economic
development through entrepreneurship and access to capital
2. Deliver the highest quality entrepreneurial development
programs to drive the growth of global ventures from Puerto
Rico
3. Foster the development of a vibrant risk capital market that
supports entrepreneurs from seed to growth and beyond
4. Collaborate in building a powerful and well connected
entrepreneurial ecosystem
5. Support entrepreneurs by facilitating access to resources,
programs, people, and networks beyond Puerto Rico
Our Goals
Since 1996, through a strategic partnership with Abbott Capital
Management, GGI provides local investors with access to a
highly diversified portfolio of private equity partnerships through
the Guayacán Family of Funds (GFF).
GGI is the only organization in Puerto Rico that specializes in
private equity fund of fund investments.
GGI has enabled investments in 8 local PE funds; including
$2.8M in direct investment.
What We Do: Financial Impact Developing a Private Equity Market in Puerto Rico
SEMILLERO’S IMPACT POTENTIAL
JOB CREATION
ECONOMIC IMPACT
Grow 10 companies from $5M to $25M in sales
$200M in new sales generated
9,692 JOBS
CREATED
$242M ECONOMIC
IMPACT
Management fees from GFF are fully reinvested into
entrepreneurial development efforts in Puerto Rico with two
main objectives:
• Accelerating the growth of global ventures from Puerto Rico
• Increasing awareness of innovation, entrepreneurship, and a
global mindset in Puerto Rico
Our programs support ventures at different stages of
development:
• Idea
• Start-Up
• Growth
Investing in Entrepreneurial Development in Puerto Rico
What We Do: Social Impact
Our Programs
1. A new fund providing seed capital to early-stage innovation driven
enterprises in Puerto Rico
2. The fund will invest in a first cohort of up to 10 companies through a
phased, milestone-based, investment program:
• Phase 1: $25,000
• Follow-on investment rounds: Up to $200,000 for top performing ventures
IDEA Seed Fund
Linking capital, market intelligence and know-how
to grow sustainable food and agriculture businesses.
PR’S FIRST FOOD AND AG PRIVATE EQUITY FUND
FOR INVESTORS FOR ENTREPRENEURS
WHY PRIVATE EQUITY IS A GREAT OPTION
IDENTIFY GROWTH POTENTIAL AND CREATE THE CONDITIONS
FOR GROWTH
ACTIVE EXPERIENCED PARTNERS
LONG-TERM COMMITTED
CAPITAL
DISCIPLINED BUSINESS METHODOLOGY
& CORPORATE GOVERNANCE
Greater number of high quality investable ventures
Entrepreneurs who understand implications of equity
investments
Institutional and individual investors who are well-educated on
the asset class
Variety of local risk capital alternatives for entrepreneurs at
different stages of growth
Pipeline of emerging fund managers
Funds that are a source of more than capital for entrepreneurs:
guidance, mentorship, networking, management talent, etc.
Long-Term Vision
