Latin Inc
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Stanford Burns Latin Americans Seeking Shelter From Currencies
Investors across Latin America who placed funds offshore to escape financial instability at home have seen their strategies backfire after trusting alleged fraudsters R. Allen Stanford and Bernard Madoff. Venezuelans may have had as much as $3 billion invested with Stanford, who the U.S. charged with running an $8 billion fraud, according to the South American country’s banking regulator. In Argentina, savers probably channeled $400 million to Bernard Madoff, accused by U.S. prosecutors of running a $50 billion Ponzi scheme, said Osvaldo Prato, a lawyer representing investors. The losses by Stanford’s and Madoff’s investors may prompt Latin Americans to seek refuge in more transparent, less risky investments, said Alberto Ramos, senior Latin America economist at Goldman Sachs Group Inc. in New York. All six major Latin American currencies have weakened against the dollar in the past six months, with Mexico’s peso plunging 30.4 percent. In the past two days, investors packed the offices of Stanford’s affiliates in Venezuela, Mexico, Peru, Panama and Ecuador to demand their money back. Clients of Stanford Group Venezuela Asesores de Inversion CA were told that their accounts had been frozen, said Carlos Araujo, a Caracas-based financial adviser who said he has $80,000 invested in certificates of deposit issued by Stanford’s Antigua bank. Investors often shift money abroad to avoid taxes, leaving them little recourse to recoup funds lost to frauds because it could attract attention from authorities, Ramos said. Investing at home may not be attractive either, he said. Investors often shift money abroad to avoid taxes, leaving them little recourse to recoup funds lost to frauds because it could attract attention from authorities, Ramos said. Investing at home may not be attractive either, he said.
GP Investments' Octavio Lopes: 'The Whole World Is Deleveraging'
Octavio Lopes, senior partner of private equity firm GP Investments, is in the middle of raising what might be the largest private equity fund ever for Latin America. In a podcast recorded in Sao Paulo, Lopes discusses the prospects for investing in Brazil and Latin America, where he thinks commodity prices are headed, and how the discovery of oil in places like Brazil, Colombia and Mexico will affect the local and regional economy.