Singapore’s GIC ramps up Brazil assets

18 August 2014   Category: News, Asia, Global, Singapore, Latin America, Brazil   By Derek Au

The Government of Singapore Investment Corporation (GIC) has acquired an 18.5% stake in Brazilian education company Abril Educacao for an undisclosed price, in its latest move to increase exposure to Latin American assets.

Based on the closing share price of Abril, a leading player in the Brazilian primary and secondary education market, on August 14, the stake was worth about US$265 million.

Abril employs about 7,000 staff and operates schools in Sao Paulo and Rio de Janeiro, as well as publishing textbooks and providing learning systems. It focusses on the so-called K-12 segment, which covers primary and secondary education.

“The investment stems from GIC's belief in the growth potential of the K-12 education market in Brazil, as well as Abril's unique multi-segment positioning with a focus on quality, renowned brands and robust operational capability,” GIC said in a statement.

The acquisition is the latest investment by GIC, Singapore’s $320 billion sovereign wealth fund, into the Latin American country. Earlier in May, the GIC led a group of investors including Tiger Global Management, Temasek Holdings, Iconiq Capital and Kaszek Ventures to invest approximately $170 million into Brazilian online sports goods retailer Netshoes. GIC secured a seat on the firm’s board as part of the deal.

GIC signalled its intention to step up its exposure to Latin America when it opened an office in Brazil, its tenth worldwide, in April to focus on opportunities in the region. Lim Chow Kiat, chief investment officer at GIC, has said the fund is confident in the long-term growth story of Latin America, despite ongoing volatility in emerging markets. GIC said the Brazil office would help to build a network of business relationships in the region and seek investment opportunities for the fund.