BREAKING: Votorantim and Temasek will invest nearly R$4 billion in growth companies

Grupo Votorantim is teaming up with Temasek, Singapore’s sovereign wealth fund, to create a new manager willing to invest R$3.6 billion in justice growth In Brazil – it occupies a space so far dominated by Softbank.

The new manager – named 23S Capital – Matthews Villares, will lead, head Temasek in Brazil, and will house the ten employees the country’s sovereign wealth fund already has.

Temasek has been operating in Brazil for 14 years and has already invested in companies such as Netshoes, Hidrovias do Brasil, Conductor, Bionexo, Clínica SIM and Neoway.

The sovereign wealth fund has more than $1 trillion allocated in a variety of countries – from Asia to the United States, and from Europe to Latin America.

The idea of ​​23S Capital is to write checks from R$250 million to R$300 million late stage That “proven companies and with it unit economics who stopped standing,” Matthews said Brazil Journal.

The director will be neutral regarding the sector, but will focus on sectors with natural growth in Brazil, such as health, education, fintech and agribusiness.

For Votorantim, the partnership with Temasek is another step in transforming its portfolio. In recent years, CEO Joao Schmidt has diversified the portfolio, creating new investment sectors – in infrastructure and real estate – and making the company more connected. (The company is a partner of CPP Investments in Auren Energia, from Caisse de dépôt et placement du Québec – CDPQ at Votorantim Cimentos in North America, now in Temasek).

Votorantim made a profit of R$49 billion last year, with an EBITDA of R$12 billion and net income of R$7 billion. The hold I invested about R$5 billion annually.

This isn’t the first time Temasek has partnered with another popular investor to gain exposure specific markets or sectors.

Last year, the sovereign wealth fund partnered with BlackRock to invest in startups that solve climate change problems. The two companies have committed to inject $600 million into the joint venture, called Decarbonization Partners.

“With everything happening on the global stage, we need to think more and more about complementary partnerships with companies that share our same long-term vision and values,” Dilhan Pillai, global CEO of Temasek, told the Brazil Journal.

According to him, Temasek can help investing companies leverage their global presence, attract talent and build relationships.

a timing From the partnership looks perfect.

The creation of a new manager comes at a time when the correction of global stock markets has been putting pressure on evaluation Private companies – and in the midst of the global restructuring of Softbank, whose operations in recent years have provided liquidity to Latin American startups.

Despite the establishment of the joint venture, Dilhan said Temasek will continue to make investments alone in Brazil – particularly in previous rounds, such as Series A and B.

Historically known for its investments in Asia – where it holds shares in a number of financial institutions – Temasek has diversified its portfolio, increasing its exposure to Europe and the United States. In the past eight years, 70% of the total allocated capital went to these two geographies.

The fund has also been moving down the value chain: today, 40% of the number of transactions is in the early stage, although 80% of the capital is still in large tickets.

New investments have focused on fintech companies, payment companies, insurance and asset management companies — which are taking advantage of the growing longevity of the population and the need for financial planning that comes with it.

Geraldo Samor and Pedro Arbex