Productivity Revisited by Ana Paula Cusolito & William F. Maloney

Author:Ana Paula Cusolito & William F. Maloney
Language: eng
Format: epub

BOX 4.2

Capital Market Development and the Facilitation of Exit—Novo Mercado in Brazil

Private equity in new ventures eventually needs a way to exit to reap greater returns. Two institutions in Brazil, Novo Mercado and Bovespa Mais, have proven critical to developing Brazil’s venture capital market. Brazil has radically increased flows for initial public offerings through its Novo Mercado, a premium listing tier that requires firms to adopt governance standards that are stronger than legally demanded. The increased transparency has helped stimulate Brazil’s venture capital and private equity market. In 2007 Novo Mercado celebrated the addition of its 100th company, having hosted 81 of Brazil’s 113 initial public offerings since its founding.

Bovespa Mais, which broadly holds to Novo Mercado standards, targets small and mid-cap firms, seeking to host companies with a gradual strategy of gaining access to capital markets. It helps companies improve their transparency, grow their shareholder base, and increase liquidity.

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