Melvin: Buying Brazilian Bargains

Editor's Note: This article was originally published at 3:30 p.m. EDT on Real Money on July 29. Sign up for a free trial of Real Money.

I keep a pretty close eye on what private equity (PE) investors are doing with their cash. Their buying-and-selling activities can often give solid insight into the valuation of a particular sector or asset class. Their focus on valuation and extended time frames is very similar to my own, so it makes sense for me to look for coattail opportunities.

I subscribe to several private equity news sites and have word searches set up in Google (GOOG), (GOOGL) news for industry leaders such as Leon Black, David Rubenstein and Henry Kravis. I track them as closely as I do the leading value investors as I detect ideas to steal in my ongoing search for long-term market profits.

In the past couple of weeks, there has been a substantial amount of talk in the PE world about Brazil. Carlyle Group is raising a fund to take advantage of low asset prices and corporate valuations there. Gavea, a Brazilian based PE-fund run by a former Brazilina Central Bank president, is raising a $1 billion fund . So is Patria Investments, another Brazilian based fund that Blackstone (BX) has invested in. Kohlberg Kravis and Roberts (KKR) just made its first investment in Brazil by purchasing a data center company called Aceco. GP Investments is said to be increasing its stake in its home country by focusing on infrastructure and real estate related deals this year.

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