LatAm Search Funds Study

January 05, 2026

by an investor from Tufts University in London, UK

We loved the insights and encouragement from the Spectra-Cerralvo Search Funds study from Latin America. Take a look via this link: https://www.linkedin.com/posts/newtonequity_latin-america-search-fund-study-november-activity-7407798140663255041-A6f1?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAM3e0IBneGc3DQ0Uwpo5d38NJjXrVlu1dc

9 Likes

10 Replies

188 Views

Replies

Reply by a professional-legal
from Northwestern University in São Paulo, SP, Brasil

Thanks for sharing here Vani. From a LatAm perspective, It’s one of the most comprehensive and data-driven views of the region I’ve seen recently. I shared in my LinkedIn a few takeaways that are particularly relevant for Brazil: • Brazil is now the most active Search Fund market in LatAm, overtaking Mexico in recent cohorts. This reflects both ecosystem maturity and a growing pipeline of viable lower-middle-market companies. • Deal structures are adapting to local realities in LatAm. Earn-outs (≈8% of deal value) and moderate leverage (≈37%) are increasingly used to bridge valuation gaps and manage credit constraints. • Searcher profiles are changing. More operators, ex-founders and non-MBA professionals are entering the market — a trend that fits well with Brazil’s operationally complex SME landscape. Solo Searchers are now 78% of the cohort! From a legal and structuring perspective, Brazil continues to demand careful attention to governance, seller alignment, debt terms and tax — but the opportunity set is clearly there. Highly recommended reading for investors, searchers and advisors active (or looking to be active) in Brazil and Latin America.

Reply by a searcher
from Erasmus University Rotterdam in Araçatuba, State of São Paulo, Brazil

Hi Vani! Thanks for sharing! It was a great study, showing a focused look on a huge and growing ETA market! And it's the first study that shows statistics on the search-capital fundraising part too, which was very interesting. Very good takeaways on the deal structure (which is very different in the region compared to US or Europe - with use of seller's notes for a big portion of the acquisition, specially in Brazil) and searchers profile (generally older and with more diverse backgrounds). Definitely worth a look!

+8 more replies.

Join the discussion