The name Cisneros is synonymous with business acumen and opulence in the minds of Venezuelans old enough to remember the pre-Hugo Chavez years.
Over generations, the billionaire family brought the Studebaker, Pepsi-Cola and department stores to the oil-rich country. It launched DirecTV in Latin America, ran beauty pageants, produced soap operas and owned banks, TV stations, ice-cream makers and brewers.
Now, decades after having moved most of the family and its assets to the U.S. as Chavez was ramping up his socialist revolution, a new generation of Cisneros is scouring the ravaged economy for assets to buy on the cheap.
Eduardo Cisneros, the grandson of patriarch Diego Cisneros, co-founded a private-equity fund in Florida that has raised over $200 million from investors, according to a filing with the SEC. The fund, called 3B1 Guacamaya Fund LP, has already used about $60 million of that cash to snap up Venezuelan businesses, including a paint maker, over the past year, according to several people with knowledge of the deals who asked not to be named because they weren’t authorized to speak publicly about the matter.
In making the plunge, Eduardo and his partner—Rodrigo Bitar, the head of a boutique New York-based M&A shop—are positioning themselves as early arrivals in what could prove to be a scramble to acquire choice assets in the once-wealthy nation at deeply discounted prices. After years of mismanagement that triggered a 70% decline in the size of the economy and drove millions of Venezuelans to flee, Chavez’s hand-picked successor, Nicolas Maduro, is slowly embracing free-market reforms to alleviate the crisis and consolidate his hold on power.
Some local analysts are actually predicting the economy will grow in 2021 as Maduro loosens Covid restrictions. An expansion, no matter how tepid, would halt a string of seven straight years of economic contraction.
“The opportunities for profit are immensely high in the first phase of economic recovery,” said Peter West, an economic adviser at London’s EM Funding. “But you also have to be an investor with high appetite for risk, willing to dip your toes in the water.”
The 3B1 Guacamaya fund operates in the same Coral Gables, Florida, headquarters as Cisneros Corporation, a consulting service with “young, modern and creative professional leadership” founded by brothers Eduardo, Andres and Henrique, according to its website.
The fund acquired a majority stake in publicly-listed paint maker Corimon CA. The company hasn’t reported results since 2015. Back then, it had 1,300 employees working in 190 stores in Venezuela and several other countries in Latin America.
Calls and messages seeking comment from Eduardo Cisneros, Cisneros Corp. General Counsel Mark Lopez and Bitar weren’t returned. Corimon’s chief executive officer Esteban Szekely also didn’t respond to calls and messages seeking comment.
As limited as the deals have been so far—names of the other businesses acquired besides Corimon weren’t ascertainable—Cisneros and Bitar have quickly become the talk of the small, tight-knit community of dealmakers and financiers in leafy eastern Caracas. Two-hundred million dollars may not go far in most financial capitals in the world, but in Venezuela’s atrophied M&A market, it makes the duo an immediate force.