Patria Investments (PAX) Status update summary

Macroeconomic and geopolitical landscape

• Latin America is experiencing robust economic growth, with GDP projected to accelerate from below 2% to nearly 3% by 2026-2027, driven by a growing middle class and strong domestic markets.

• The region attracts significant foreign direct investment (FDI), accounting for 14% of global net FDI, reflecting its openness to long-term capital.

• Political shifts are favoring more market-friendly administrations, which is supporting asset appreciation and increased private investment.

• Regulatory frameworks, including independent central banks and strict monetary policy, have enhanced market resilience and reduced contagion from global crises.

• Geopolitical risks in Latin America remain low compared to other regions, with recent events in Venezuela seen as potential opportunities rather than threats.

Investment trends and capital markets

• Pension reforms and regulatory changes are increasing assets under management (AUM) and enabling higher allocations to alternative investments.

• Capital markets are deepening, with both institutional and individual investors showing greater interest in alternatives, especially as interest rates trend lower.

• Private credit and real estate credit are gaining traction, supported by financial innovation and digital platforms that broaden access.

• Local fundraising is rising, driven by economic growth, regulatory support, and the ability to offer infrastructure solutions tailored to local needs.

• International investors, particularly from North America and Asia, are increasing allocations to Latin America as a diversification strategy amid U.S. dollar depreciation.

Infrastructure and sectoral opportunities

• Infrastructure remains a key investment vertical, with significant opportunities in power, logistics, transportation, and digital/data centers.

• Privatization and concession programs, especially in Brazil, are opening up over $100 billion in equity opportunities through 2030.

• Data center demand is surging, with new projects in Brazil and across the region serving both local and global clients, including hyperscalers.

• Infrastructure exits are facilitated by deepening capital markets, allowing for more flexible divestment options such as listed funds.

• Additional infrastructure projects include sanitation, water services, and support for critical industries like mining through desalination plants.