Key Takeaways
- • Latin American investors have dramatically reversed their geographic allocation preferences, with 67% now identifying Latin America as offering the best investment opportunities over the next 12 months—a 22-percentage-point increase from the previous year's 45% and a sharp reversal from 79% who favored North America last year.
- • Brazil and Mexico, the region's two largest economies, are the primary focal points for this capital reallocation, driven by nearshoring opportunities that have attracted increased activity from international general partners over the past four years.
- • Higher real interest rates have created a "buyer's market" with compressed valuations, positioning alternative asset investors to deploy capital at attractive entry points ahead of anticipated rate declines that could unlock value creation.
- • The shift reflects both a secular trend of growing regional investment focus and cyclical macroeconomic factors, with local fund managers reporting increased appetite from institutional investors recognizing long-term deployment opportunities in the current valuation environment.
Summary
Latin American institutional investors and alternative asset managers have materially shifted capital allocation priorities back toward their home region, according to a Preqin survey conducted in late 2025. The polling data reveals a striking reversal in investment sentiment: 67% of surveyed professionals now view Latin America as offering superior opportunities over the next 12 months, compared to only 45% in the prior year's survey. This represents a complete inversion of the previous year's consensus, when 79% of respondents expected primary opportunities in North America.
The reallocation concentrates on the region's two largest economies. Brazil and Mexico have emerged as the preferred deployment destinations, reflecting both structural and cyclical factors. Juan Carlos Martín, founder of Mexican alternative asset manager Galleon Capital, characterized the shift as a secular trend with cyclical reinforcement. In remarks during a Preqin webinar, Martín highlighted nearshoring dynamics as a key driver, noting that "the region offers some nearshoring-related opportunities that are attracting international GPs to buy in the region." He further observed that international general partners have substantially increased activity in Latin America over the past four years, suggesting sustained institutional capital inflow beyond temporary market cycles.
Macroeconomic conditions have created a compelling entry environment for deploying capital. Higher real interest rates have compressed asset valuations across the region, creating what Priscila Rodrigues, head of Funds of Funds Alternatives at Brazilian manager XP Asset, described as a "buyer's market." Rodrigues emphasized the strategic timing for long-term investors: "Investors who understand long-term investment perspectives know that this is the right time to be deploying capital." She noted that portfolio companies are structurally well-positioned to generate value as interest rates normalize downward, and observed a corresponding uptick in domestic investor appetite driven by this recognition of favorable risk-reward positioning.
This convergence of factors—nearshoring tailwinds, attractive valuations, and anticipated rate environment improvements—has rekindled regional investor confidence in Latin American alternative assets as a core portfolio building block rather than a peripheral opportunity.
The reallocation concentrates on the region's two largest economies. Brazil and Mexico have emerged as the preferred deployment destinations, reflecting both structural and cyclical factors. Juan Carlos Martín, founder of Mexican alternative asset manager Galleon Capital, characterized the shift as a secular trend with cyclical reinforcement. In remarks during a Preqin webinar, Martín highlighted nearshoring dynamics as a key driver, noting that "the region offers some nearshoring-related opportunities that are attracting international GPs to buy in the region." He further observed that international general partners have substantially increased activity in Latin America over the past four years, suggesting sustained institutional capital inflow beyond temporary market cycles.
Macroeconomic conditions have created a compelling entry environment for deploying capital. Higher real interest rates have compressed asset valuations across the region, creating what Priscila Rodrigues, head of Funds of Funds Alternatives at Brazilian manager XP Asset, described as a "buyer's market." Rodrigues emphasized the strategic timing for long-term investors: "Investors who understand long-term investment perspectives know that this is the right time to be deploying capital." She noted that portfolio companies are structurally well-positioned to generate value as interest rates normalize downward, and observed a corresponding uptick in domestic investor appetite driven by this recognition of favorable risk-reward positioning.
This convergence of factors—nearshoring tailwinds, attractive valuations, and anticipated rate environment improvements—has rekindled regional investor confidence in Latin American alternative assets as a core portfolio building block rather than a peripheral opportunity.
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