Private equity scours the Andes

THE ANDES HAVE rarely been at the forefront of international investors’ minds, instead conjuring up images of poverty, guerrilla groups and presidents who survive in office for just a few years. In Latin American business and politics, the might of Brazil and Mexico dominate, and the region’s private equity growth has been no exception. But just as tourists have begun to flock to Peru’s famed Inca citadel of Machu Picchu, so teams of private equity specialists are beginning to scour the Andean region’s capitals of Lima, Bogotá and Santiago, as well as nearby Buenos Aires, for buyout opportunities and the chance to develop funds.

Political stability, more open trade, a surge in commodity prices, low inflation and interest rates, fiscal discipline, pension fund reform and strong consumer demand are all leading to unprecedented growth rates in Peru and Colombia. Chile is knocking...