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Decrease in investments indicates higher selectivity in several countries

The figures released on the last BVN (#16) show a 72% fall in VC/PE investments in Brazil for the first semester of 2002, compared to the same period last year. Similar results about the VC/PE market in other countries were released, indicating that this is a global phenomenon, more pronounced in emerging markets. Within this context, the German market stood out, as VC/PE activity decreased only 29% in the period due to tax reforms that came into effect during the year.

Sources: USA - National Venture Capital Association; Canada - Canadian Venture Capital Association and MacDonald & Associates; Germany - German Venture Capital Association BVK; Spain - Universidad Complutense de Madrid; Asia - Asian Venture Capital Journal; Brazil - Stratus database. Data refers to the first semester 2002.

Investments: • Padtec, manufactures DWDM (Dense Wavelength Divi-

sion Multiplexing) systems and equipment, an advanced technology used in communication networks built with optical fiber. The company received an investment from Pactual Internet.

• MeuGrupo S.A., an integrated communications platform for businesses and consumers through the use of e-mail. The company received US$500,000 from EsNet, an American venture capital firm based in Utah.

Exits: • Drogasil: Patrimônio and Latin America Enterprise Fund

sold their stake in the pharmacy chain back to the Pires family, previous shareholders of the company.

• Injepet Embalagens: Baring Latin America Partners sold its stake in the manufacturer of PET packaging products to the Australian-based Amcor Limited.

• Mobitel: Baring also sold a portion of its stake in the operator of pagers and call centers to Portugal Telecom.

VC/PE deals in July and August 2002

Stratus and Darby Overseas have formalized an alliance to jointly develop the field of Mezzanine Finance operations in local currency. The joint venture will raise and manage Mezzanine Funds for Brazilian institutional investors. About Darby: Formed in 1994 by Nicholas F. Brady, former U.S. Treasury Secretary. Its CEO is Richard H. Frank, former World Bank Managing Director and CFO of the IFC/World Bank. Darby Overseas Investment is a leading private investment firm, focusing on Private Equity, Mezzanine and other types of investments in emerging markets such as Latin America and Asia. Darby’s Mezzanine team, led by Pedro Batalla and Robert Graffam is considered to be among the most distin-guished and internationally experienced groups in this field.

Alliance between Stratus and Darby Overseas

Advent: US$265 MM Fund for Latin America

Advent International Corp. has raised its second Latin American investment fund, Latin America Private Equity Fund II (LAPEF II), totaling US$265 million. The fund’s focus will be middle-market companies with dominant market positions, mainly in Brazil, Argentina and Mexico. The investments size will range from US$10 million to US$100 million, including co-investors on larger deals. This is the largest fund for Latin America raised over the last few years. As the decade’s first international fund, LAPEF II could represent the gradual reopening of investor interest on the region.

73%

72%

69%

60%

51%

29%

0% 20% 40% 60% 80% 100%

Asia

Brazil

Canada

Spain

USA

Germany

VC/PE in 2002 Decrease in investments - % (amounts invested)

(US$12.5 bi)

(US$0.4 bi)

(€1.2 bi)

(€0.2 bi)

(US$0.5 bi)

(US$0.1 bi)

* Except Japan

Comings & Goings • Flávio Peixoto left Pactual Electra Capital Partners’ team. • Sean Lieb left AIG Capital Partners’ team. • Charles Spragins left MVP’s (Mercatto Venture Partners)

team and is currently managing Gávea Angels project of the Catholic University of Rio de Janeiro (PUC-RJ).

Calendar of Events • Sep/17-18: II Encontro Nacional de Gestão de Investi-

mento e Fundos - FCE (São Paulo) • Sep/16-20: X ANPROTEC Workshop (São Paulo). • Oct/01-02: Private Equity Analyst Conference (New York) • Oct/15-16: Entrepreneur Fair - business round table -

SEBRAE (Recife) • Oct/28-31: Congresso Annual dos Fundos de Pensão -

ABRAPP (São Paulo). • 11/21-22: 7th Venture Forum Brasil - FINEP (São Paulo).

Brasil Venture News Brazilian Venture Capital/Private Equity Highlights Year III - #17 Aug/Sep 02

A B O U T S T R A T U S Stratus Investimentos is an independent Venture Capital / Pri-vate Equity firm, specialized in investment projects in Brazil.

www.stratusbr.com