Following dramatic macroeconomic changes in 1991, the whole Argentine economy was deeply transformed at the microeconomic level. Central to this transformation was the inflow of foreign capital, in the form of mergers, acquisitions, joint ventures, greenfield investments, strategic alliances,...

M&A activity has greatly increased in Latin America in the recent past. As a result, the improvement of valuation techniques has gained a prominent place in the agenda of investors and financial analysts dealing with the region. The task entails two substantial challenges, however. First,...

Investing in emerging economies may be an exciting and lucrative game, but a serious macroeconomic crisis may leave investors pedaling in thin air. This article discusses how should such uncertainty be dealt with when valuing investments in turbulent markets

This paper discusses the challenges of applying traditional valuation techniques to emerging markets, and reports on how CFOs, financial advisors and private equity funds meet those challenges in Argentina, a major Latin American emerging economy. On many fronts, our findings show that there is...

Emerging markets are prone to event risk - major political, economic and institutional catastrophes that can radically change the attractiveness of an acquisition target almost overnight. Traditional risk measures are unable to capture these unusual yet highly disruptive events. This paper...

In emerging markets, appraisers of private companies confront a ‘beta dilemma'. If they attempt to compute the target's cost of equity by employing the beta of a local comparable, such may simply be absent at the domestic level or, if it exists, its beta may be unreliable. If analysts use...

This paper is the first to empirically map entrepreneurial finance in Argentina, by studying in-depth three different types of actors: Entrepreneurs, formal private equity and venture capital (PE/VC) funds, and angel investors. Through separate surveys, the operational characteristics of these...

The beta space is a powerful way to map the investment strategies of semi-diversified investors. Three metrics define the beta space: regular or exogenous betas (x-βs), linked to macroeconomic cycles; endogenous betas (n-βs), related to innovation hazards; and a combination of the two — the...

Using a new set of risk benchmarks, we estimate the opportunity cost of equity capital for entrepreneurs, limited partners and general partners of venture capital funds. The figures we obtain turn out to be well below the internal rates of return (IRRs) customarily targeted in the private equity...