How we work

The Investment Decision

Each potential investment has to be “sponsored” by a PEXO VENTURE professional. It is the sponsor’s responsibility to present the opportunity to PEXO VENTURE along with a preliminary work plan, a proposed transaction budget and a preliminary transaction structure. If the transaction is considered attractive a transaction team, including at least one but not more than two partners, is formed and preliminary analysis is performed. If the preliminary analysis confirms the initial investment thesis a complete work schedule is prepared detailing the timing of the transaction and the resources, including outside advisors, required to execute the transaction.

The work schedule also includes the “key issues” that must be evaluated to confirm the attractiveness of the opportunity. Review meetings are held as answers to the key issues are obtained. Commitment to the transaction is continuously evaluated during the review meetings.
Analyses of transactions follow two separate but, critical paths. One path is the due diligence path used to confirm historical performance, evaluate potential risks and develop an appropriate transaction structure. The second path is the strategic review.

The consummation of any transaction has to be based on a strategic plan. Why do we want to own this company? What can we do with this asset that is not already being done? What are the competitive forces facing this company? How do we face this competition? What do we do on the first day, first week, first month that we own this company? And, how will we exit this investment and create value for our investors.

Once these questions have been answered the transaction is formally presented to the Investment Committee. We work to achieve unanimity in the Investment Committee and will work until it is achieved, or forego the opportunity.

Post Investments

Strategic and Operating plans are valuable only if they are implemented, monitored and updated. The partners of PEXO VENTURE take an active role in the supervision of portfolio companies. It is the role of PEXO VENTURE to provide the managements of portfolio companies with the tools and resources to successfully execute the strategic and operating plans. It is also the role of PEXO VENTURE to continuously evaluate the capabilities of the management and make the difficult but necessary changes when required.

One of the competitive advantages of PEXO VENTURE are the long a deep relationships that the partners have developed over the years with the leading business groups in the countries in which we operate. PEXO VENTURE draws on these relationships to create the most effective and productive Board of Directors for each of our investments. Although PEXO VENTURE enjoys absolute control of its portfolio companies, it has created independent Board of Directors for all of its investments.
Individuals are asked to join the Boards of PEXO VVENTURE based on the specific needs of the portfolio company and on the value added by the member. Our Boards of Directors are active and meet on a regular basis. Board Members are asked not only to sit on the Board, but to take an active role on Operating, Finance, Strategic and Human Resources Committees.

Realizing Shareholders Value

Unlikely more developed markets were realizations are often a matter of price and not of timing, Latin America is characterized by windows of opportunity for value realization. These windows are unpredictable and of varied duration. Value creation in Latin America is, therefore, an issue of creating real, sustainable value.

Latin America is a large and growing market. It is a market which unfortunately suffers significant fluctuations. But it is a market that is too important to abandon. Buyer may leave for a period, but will inevitable be drawn back by the attractive fundamentals.

PEXO VENTURE manages its investments so that they will be attractive at the time that buyers return to the region. We do not mange to show short term, temporary results, but to demonstrate sustainable profitability