Excerpts from the article can be found below:
However, Steve Eaton, partner at Eaton Partners, the fund placement agent, in Rowayton, Connecticut, downplays investor perceptions of corruption. Eaton, who is closely involved in the firm’s Latin American business, says that corruption will “absolutely” be “taken into consideration as an added risk factor when investing in any sort of emerging market, but only along with other factors.”
He finds, moreover, that in the case of Mexico, “the perception among investors is that Mexico has in many ways become safer and better regulated, with less concern about corruption”.
Nevertheless, Eaton sees investors responding less to corruption, and more to a combination of economics and valuations. “A lot of investors feel Brazil has become a bit too hot”, he says. “The economic uncertainty has made some investors think, ‘OK we’ve got the exposure we need, we don’t want to add to it.'” Brazil’s economy has been hit not just by the end of the commodity boom, but also by high interest rates and a retrenchment in bank lending. These investors have moved into Mexico – “We hear a lot from investors who want to get involved there” – and into markets with “smaller GDP and good rates of growth”, namely Colombia, Chile, and Peru.
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