Data on US investors for LatAm based searchfunds

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January 29, 2019

by a searcher from Stanford University - Graduate School of Business in Palo Alto, CA, USA

Does anyone know how US investors view returns for searchfunds that are outside the US? More specifically, do they try to negotiate a dollar denominated preferred return or are they comfortable taking the currency risk? 

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commentor profile
Reply by a professional
from Bentley University in St. Petersburg, FL, United States
Hola Pablo; I would argue that US investors might be comfortable taking the currency risk as long as the returns reflect taking that risk. In other words, returns are substantially higher. Also, consider using currency hedging strategies. On the other side, most LATAM economies are operating on a US dollar price basis.
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Reply by a searcher
from IESE Business School in Amsterdam, Netherlands
During the HBS ETA conference in 2017, I remember that Sandro Mina mentioned that more and more US-based investors where comfortable taking the currency risk. Otherwise, it would be very difficult for searchers to hit the IRR hurdle.
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