How to Encourage Greater Private Equity Investment in Latin America Development of Non-Bank Financial Institutions in Latin America December 5, 2002 J. Scott Swensen

An Introduction Deutsche Bank Total assets exceeding €918 billion (1) Market Capitalization of €49 billion (1) Comprehensive range of investment banking services Asset management business has €1 trillion in assets DB Capital Partners, Inc. Deutsche Bank’s private equity platform Offices in U.S., Europe and Asia Over 100 professionals 17 year history of private equity investing Approximately €10 billion in private equity business Investment manager for Latin Power Funds As of December 31, (1)

Latin Power Funds Scudder Latin American Power Fund I Formed 1993 $100 million of capital 7 projects in 5 countries Scudder Latin American Power Fund II Formed 1998 $157 million of capital 9 projects in 7 countries Latin Power Fund III

Illiquid investments in unlisted equity securities Can be minority or majority position Can be provided by strategic investors or funds Different types: –Venture Capital –Growth –Buyout –Mezzanine –Vulture What is Private Equity?

Who Invests in Private Equity Funds?

Why Would a Developing Country Want to Encourage Private Equity Investors to Invest in Their Country? Provides capital that is not available locally Provides growth capital to create jobs Stable capital vis-à-vis portfolio investments Good timing match with pension fund and some insurance company liabilities

What Do Private Equity Investors Look For? Politically stable & economically growing country Transparent & stable environment: –Legal –Taxation –Regulation Ability to exit investments Ability to repatriate capital Manageable currency risk