Summary of the study conducted by Spectra Investments & Cerralvo.
Even though the study does not account for all searches, acquisitions, and exits carried out in Latam over the past 20 years (we have noticed some omissions compared to the data shared in the IESE study on international SFs, as well as some data we have compiled from SFNews), it remains an excellent resource for gaining a specific overview of activity in the region.
The Latin American SF ecosystem continues to expand rapidly, positioning the region as one of the most active globally for this investment model. In 2024 alone, 24 new funds were raised, and 10 additional funds remained in the fundraising stage. Since the first recorded Latin American SF in 2008, 169 funds have initiated capital raising, leading to 59 acquisitions and 14 exits, with three more exits occurring in the first half of 2025. Notably, eight exits occurred in the past four years despite a challenging macroeconomic environment marked by rising interest rates and limited IPO activity, demonstrating the resilience of the model in the region.
SF activity and geography
Of the 169 funds that began fundraising, 84 have completed the search phase, resulting in 59 acquisitions and 25 searches that concluded without a deal. Currently, 48 funds are actively searching, 10 remain in the fundraising stage, and 27 were unable to raise capital and closed. On average, 69% of funds completing the search phase successfully acquire a company. Mexico and Brazil are the dominant markets, with Mexico leading early activity and Brazil recently overtaking in the number of funds formed. Other countries, including Colombia, Chile, and Peru, are showing increasing activity, reflecting broader regional adoption and maturation of the search fund ecosystem.
Entrepreneur profile
The profile of SF entrepreneurs in Latin America is evolving. Solo searchers now make up 78% of the 2023–2024 cohort, up from 41% in 2017–2018. There is a noticeable increase in non-MBA founders, now at 51% compared to 23% in earlier cohorts, as well as a rise in experienced operators and ex-founders entering the SF model. Median founder age remains in the low 30s, although 18% of recent searchers are over 40. The presence of professionals with hands-on operational experience has risen to 38%, while those with finance, private equity, or venture capital backgrounds have declined. This trend reflects the growing accessibility of SFs to diverse educational and professional backgrounds.
Acquisition trends and structures
Mexico leads in the number of acquisitions, particularly from funds formed between 2017 and 2020, while Brazil shows strong activity across recent cohorts. Other countries, including Chile, Peru, Colombia, Paraguay, and the Dominican Republic, are gradually contributing to acquisition activity. Services and software remain the most prominent sectors, with healthcare, education, manufacturing, and tech-enabled services appearing sporadically.
Acquisition structures reflect the financial realities of the region: median debt represents 36.5% of deal value, while earn-outs, a flexible alternative to financing, account for a median of 8.2% of deal value. Median purchase price in 2023–2024 was $17.4M. Despite improved company fundamentals—EBITDA margins of 34%, EBITDA growth of 25%, and revenue growth of 20%—valuation multiples have remained relatively stable, reflecting disciplined pricing practices.
Performance and returns
SFs in Latin America have delivered strong returns. Overall ROI stands at 3.1x, with an IRR of 28%. When excluding top-performing outliers, ROI adjusts to 2.5x and IRR to 23.4%. Among acquisitions, 87% generate positive returns, and 29% of deals yield over 5x returns. Solo-led funds experience more downside risk, with 26% ending in losses, while partnership-led funds have avoided complete losses entirely. Partnerships also show a higher probability of achieving returns above 2x, indicating the potential benefits of collaborative leadership.
Trends in capital and compensation
Median capital raised by solo searchers in 2023–2024 was $450k, while partnership-led funds raised a median of $700k. Salary structures vary by country: Brazil ranges from $59k to $180k annually, while Mexico is narrower ($100k–$135k) but with a higher median. The use of earn-outs alongside debt helps align incentives between buyers and sellers while mitigating financing constraints.
Conclusion and outlook
The study concludes that the Latin American SF ecosystem has reached a new phase of maturity. The market shows remarkable resilience and growth potential, supported by increasing diversity among entrepreneurs, disciplined acquisition practices, and robust investor returns. Even amid macroeconomic volatility, the SF model has proven adaptable and capable of generating strong returns, with partnership-led funds showing slightly better downside protection.
Looking forward, the combination of experienced operators, diversified geographies, disciplined acquisitions, and consistent returns positions Latin America as one of the most promising regions for SFs globally. Both investors seeking attractive returns and entrepreneurs aiming to acquire and operate businesses can find compelling opportunities in the region.
Read and download the full study here: https://spectrainvest.com/estudo/search-fund-primer-2/
