And their arrival has some of the locals speculating that the proverbial bottom to the economy and market that they’ve been waiting on for decades—spanning all the way back to the collapse that followed the oil boom of the 1970s—may finally be approaching.
Hemmed in by U.S. sanctions, Maduro is overseeing a reform push that includes an ad-hoc dollarization of the economy following years of hyperinflation and stifling government controls. His regime has also begun to offload dozens of key state enterprises to private investors in exchange for a share of the revenue or products.
While Chavez seized thousands of private companies, the Cisneros family managed to retain control of the businesses they kept in the country. Today, Venezuelans still drink the family’s Regional beer, use phone and data plans from its wireless provider Digitel and watch its TV station Venevision.
Diego Cisneros, a Cuban immigrant who settled in Venezuela, started the business empire in the 1930s.
His sons Gustavo and Ricardo—who’s Eduardo’s father—took control of the organization in 1970, and in the 1980s, the clan began an expansion outside of its home market, buying up U.S.-based sports equipment and baby product maker Spalding & Evenflo and a stake in the Spanish-language broadcaster Univision.
In 2000, the family made Florida its base for the Cisneros Group and kept expanding across the Americas, first under the leadership of Gustavo and then his daughter Adriana Cisneros. There is no link between Cisneros Group and Cisneros Corp. or 3B1 Guacamaya, Miguel Dvorak, the COO of Cisneros Group, said in a statement.
Back in Caracas, a newly-formed local association for private capital named Venecapital held an event earlier this month entitled: “Venezuela, back on the radar of international investors.”
In it, speakers heralded Venezuela as the frontier market with the greatest potential, saying those who seize opportunities in the nation aren’t sitting around waiting for the regime change that never seems to come. They pointed to telecom, real estate and the gas and oil service sectors as attractive targets for foreign investors.
Maduro’s government approved a so-called anti-blockade law in October, opening a path to increased foreign investment in the energy industry, which was nationalized in the 1970s.
Last year, Scale Capital, a Chilean investment and management firm, reached a deal to acquire DirecTV’s operations in Venezuela for an undisclosed amount.
Last year an international fund called Phoenix Global Investment bought food-producer Cargill’s assets in Venezuela, where it had operated for 34 years. In August 2019, a Chilean investor group bought the local branch of U.S.-based insurer Liberty Mutual Holding Co.
“The main risk is to enter too early, before the right conditions are set,” EM Funding’s West said. “It’s not hard to imagine a scenario in which things get worse, at least in the short term.”
This article was provided by Bloomberg News.