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Capital Allocators – Inside the Institutional Investment Industry

Aug 29, 2022

On today’s show we’ll discuss a classic empty room – an opportunity ignored by most investors. In this case, we dive into the investment case for Venezuela, a non-starter for pretty much every institution because of the country’s autocratic political regime, sanctions, and headline risk. But alongside those known risks are the potential for significant rewards.

Rodrigo Bitar is the Co-Founder and Managing Partner of 3B1 Partners, the leading private equity fund making growth investments in Venezuela. 3B1 invests in high-quality companies with leading positions in basic industries, while looking to capture a change in macroeconomic conditions in the country.

Our conversation covers Rodrigo’s upbringing in Chile, professional background, and investment opportunity in Venezuela. We discuss Venezuela’s sanctions, economic contraction, and dollarization of the economy. We then turn to investing in the country, including sourcing, due diligence, and an example of a recent transaction. We close with a discussion of the upside and risks to investing in Venezuela.

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Show Notes

(3:18) Rodrigo’s background
(6:50) Family dynamics
(10:13) Investible assets in Venezuela
(12:03) Impact of Russian oil restrictions
(13:38) Surviving economic turmoil 
(17:27) Private vs. public markets in Venezuela
(19:31) Identifying companies 
(21:51) Due diligence process 
(23:49) Assessing valuations 
(25:28) Risks unique to Venezuela 
(28:09) Conversations with potential investors
(32:05) Closing questions