The CEO notes that it will be an investment vehicle of between $60 million and $80 million, with a focus on technology companies in Latin America.
For three months now, Cristobal Silva, managing partner of Chilean venture capital fund FEN Ventures, has been living in Miami. From there, it raises capital from the United States to invest in startups in Latin America.
FEN Ventures’ first investments began in 2012. Five years later it was linked to Activa, LarrainVial’s alternative asset district. Currently, they manage around $60 Million US Dollars and their other partners are Riccardo Levi and Andrea Araneda.
– What business does FEN Ventures currently do?
– We have just closed the portfolio of our second fund, of $21 million which will invest in 25 companies, with leverage from Corfu.
In November, we will first close our third fund, which will range between $60 million and $80 million, 100% privately capitalized and focused on technology companies in Latin America. This fund is listed in Canada and will have a feeder fund in Chile, managed by LarrainVial, which can be entered with a minimum of $10,000 USD. In addition, this year we opened offices in Mexico and the United States.
Latin American Funds
– Why did you choose Mexico and the United States?
Many venture capital funds in Latin America have done the same. Mexico because it is the main destination for many of the companies we work with and the United States because Latin America is generating interest like never before in history from venture capital investors in the world.
Perhaps with the pandemic, investors have realized that they can invest outside their borders and that there are places with better opportunities than the United States. In Latin America there are issues where we are lagging more, technology gaps allow for faster growth and there are very large markets that are not well served. This is just the beginning.
Is Miami better than Silicon Valley to attract investment?
Many US trusts located in California or New York with Covid-19 have discovered that they can operate from elsewhere with tax benefits and a better quality of life. So, many started moving and the main destinations were Austin, Texas and Miami, Florida.
So Latin American funds seeking funding in the US will have to decide where they are. Miami is more practical for funds that have their portfolio, investors and staff in Latin America by time zone, flight availability and prices, family convenience, etc. It’s an ecosystem in the making, but you’re seeing a lot of activity.
Do you think Chilean pension funds should be able to invest in venture capital?
Venture capital generates a very positive impact on economies, as they hire employees with good wages and working conditions. On the other hand, it would provide diversity to pension funds and returns that were much higher than other asset classes.