15 May 2014 | Brazil Joice Alves
Spainʼs Bauhaus fosters financing in Brazil
Spanish financial adviser Bauhaus Capital Partners plans to arrange financing for a growing number of midsized projects in Brazil, CEO Javier Herrero told InfraLatinAmerica.
In the third quarter this year, Bauhaus expects to expand its portfolio in Brazil to BRL 400m (USD 180m) from BRL 250m in the second quarter this year, focusing on logistics and energy projects, he said. “We help companies with debt find capital.
We take corporate financial models and we make them bankable,” he said.
Bauhaus has a total portfolio of EUR 400m (USD 549m), with about 40% in Latin America. “We position ourselves in the middle market and we are looking for deals sized from EUR 10m to EUR 130m,” he said. Latin American expansion
Bauhaus covers Brazil, Mexico, Colombia and the Caribbean from its office in Miami, but it plans to open an office in Central America.
The company has increasingly turned to developing economies in recent years, since the global financial crisis triggered austerity programs in Europe that reduced government subsidies for infrastructure.
Nonetheless, finding capital for infrastructure projects and companies has proven easier than finding a good pipeline of projects, Herrero said. “What is really lacking is a good project. Investment funds need to compete in order to meet the best opportunities,” he said. “Capital is always a limited resource, but good projects that bring these [high] returns are very few. This happens because they havenʼt been developed properly.”
Bauhaus is not an investment fund, but an Investment Bank, Herrero explained, but it works with a global network of investors, especially private funds, which are interested in financing projects in Latin America. The investors hail from Europe, including Russia, but also Brazil and Mexico, he added.
The companyʼs global reach makes transactions less expensive by negotiating with “offshore lenders that ask for smaller returns,” Herrero said.
Street lightning PPP Bauhaus is evaluating a street lighting PPP in São Paulo and other Brazilian cities but it still needs to see terms of the deal, Herrero said. “The project needs to have a secure revenue stream,” he said. Although city governments have fared poorly with PPPs, street lighting could be a promising segment for such deals, Herrero said. São Paulo city is expected to issue the tender documents for the street lighting PPP in September.