The course correction of Patria's private equity funds in Latin America.

Patria is promoting a revaluation of two of its private equity funds in Latin America, amid a prolonged global cycle of high interest rates and inflation, lower liquidity, a drop in fundraising, and a structural review of the growth assumptions of the companies in which it invests, due to this scenario.

The adjustment, which will be reflected in the quotas for the second quarter of this year, affects buyout vehicles, in which the fund acquired more than 50% of a company's shares and sought market consolidation. This strategy has approximately R$ 50 billion under management in Latin America. Currently, Patria manages R$ 309 billion in assets, of which R$ 130 billion are in the private equity area.

“The market is basically extremely sensitive to the global interest rate cycle,” says Daniel Sorrentino, partner and global head of clients at Patria Investimentos, in an interview with NeoFeed . “The reality has proven to be very different from what was expected in the post-pandemic period.”

Fund 4, launched in 2011, will have the largest price reduction. After discussions with investors, Patria decided to liquidate the vehicle and accelerate the sale of all companies in the portfolio. "The fund should be liquidated as soon as possible," says Sorrentino.

The MOIC (Multiple on Invested Capital) ratio falls from 0.8 in the first quarter of this year to 0.3 in this quarter. The unit value will be reduced by 57%. In practice, someone who invested R$ 1 million in the fund would now receive R$ 300,000 – before the price adjustment, it was R$ 800,000.

Fund 4's portfolio includes the refrigerated logistics company SuperFrio, the self-service coffee and hot beverage company Gran Coffee, and the medical prosthetics company Víncula. All of them will be sold and banks have already been mandated to find buyers.

The fund's largest asset is Elfa, which operates in the distribution of medicines and hospital supplies. It will also be sold, but the management company believes a period of 12 to 18 months will be necessary to strengthen the capital structure before the exit.

“Operationally, Elfa is very good and profitable, but it faces a capital challenge as a result of rising interest rates,” says Luís Felipe Cruz, partner and co-CEO of Private Equity Buyout Latam at Patria Investimentos, to NeoFeed .

From this portfolio, Patria has already sold the açaí company Frooty. The deal took place in June of this year, but had not been disclosed until now. The buyer, according to the management company, is a financial investor – whose name was not revealed.

Fund 5 is also undergoing adjustments, although the outlook is different. In this case, Patria is lowering the MOIC from 2.5 to 1.6, with a 45% impact on the unit price. The portfolio includes two main assets.

One of them is the Opty ophthalmological hospital and clinic, which has just undergone a transaction. The Chinese eye health group Aier Eye has taken control of the company. Patria retained a minority stake. "The objective of this operation was to capitalize the company, reduce its leverage and allow it to return to sustainable growth," says Cruz.

Another relevant asset in this fund's portfolio is Athena, a vertically integrated healthcare group that, according to Patria, has been growing in terms of lives covered, revenue, and profitability. "It's an effort to improve the companies, seek deleveraging, and achieve growth," says Sorrentino, summarizing the strategy of Fund 5, which has already divested from the Smart Fit gym chain and the Lavoro agricultural reseller network.

Funds 6 and 7, which are post-pandemic vintage funds and therefore more recent, will not undergo adjustments to their share value. In Fund 6, however, the MOIC will decrease from 1.4 in the first quarter of 2026 to 1.2 in the second quarter of this year.

The vehicle has already made all the investments, but still has capital to make capital injections into the portfolio companies. The main assets are Banmédica, a hospital network in Chile and Colombia, acquired from UnitedHealth last year; and the regional supermarket chain Plurix.

In Fund 7, which holds 70% of the capital called upon, the main assets are the Atakarejo chain and Delly's, a food distribution company for the food service industry . There is still room for new investments in this vehicle.

According to Sorrentino, the global environment explains a large part of the movement. Persistent inflation, geopolitical shocks, trade tariffs, fiscal deficits, and a heated labor market have prolonged the cycle of high interest rates. "Today we have global interest rates at levels higher than the average of recent years and persistent inflation," says the partner at Patria.

The direct effect of this scenario is a significant drop in global private equity fundraising. According to KPMG data, the peak was in 2021, when it reached US$2.5 trillion. Last year, it reached US$2.1 trillion, a recovery after years of drought. Despite this, the number of deals fell to 19,000 in 2025, the lowest level in five years.

At the same time, the average timeframe for return of capital to investors has increased. "If before I expected five years, now I expect nine. It changes my perspective on how I allocate capital."

Another factor cited by Sorrentino is the aging of global portfolios. "Today, 40% to 50% of private equity investments were made before the pandemic," he says.

These assets weathered the pandemic, the low interest rate cycle, and then the rapid rise in rates. The result is pressure on balance sheets, margins, and deleveraging capacity. “Companies had to leverage themselves. Interest rates were at 2%. And now they are at 15%. They are spending seven times more,” says Sorrentino.

Recently, a report by SnowCap, an American short seller , questioned Patria's asset valuations , accusing the asset manager of inflating prices and delaying the recognition of losses, especially in companies like Elfa and Athena. The document raised doubts about off-balance sheet financing practices and the quality of the manager's investment exits.

When questioned about this topic, Sorrentino countered, “We are a listed, audited company, subject to the SEC and the scrutiny of our investors. The level of due diligence from institutional investors who have invested hundreds of millions for over a decade is brutal. We trust our numbers and the long-term vision we are building.”

According to Sorrentino, the portfolio revaluation process is dynamic and happens frequently. And, even with this adverse scenario due to high interest rates and inflation, Patria continues to consistently move its fundraising machine.

Last year, according to Sorrentino, Patria raised US$7.7 billion for various strategies, a growth of 40%. This year, in the first quarter, fundraising has already totaled US$2.2 billion. "We have a good outlook for continuing to raise significant capital," says the Patria partner.

He emphasizes that private equity is a risky asset class and that adverse cycles are part of the dynamic. "We are the biggest investors in our own funds. We are the ones who suffer first from skin in the game ," says Sorrentino.

Despite the adverse cycle in Latin America, Patria is seeing more favorable performance in its international strategies, especially those aimed at acquiring secondary stakes in other private equity funds.

The asset manager has just raised a secondary fund, focused on Europe and the United States, which invests in stakes in other private equity funds, taking advantage of lower market liquidity and the need for global investors to recycle capital. "We went out to raise US$500 million and we're closing with US$676 million," says Sorrentino.