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Capital Allocators – Inside the Institutional Investment Industry

[REPLAY] Rodrigo Bitar – Empty Rooms: Investing in Venezuela (Capital Allocators, EP.268)

Capital Allocators – Inside the Institutional Investment Industry

Ted Seides – Allocator and Asset Management Expert

Investing, Capitalallocation, Business

4.8806 Ratings

🗓️ 28 April 2025

⏱️ 38 minutes

🧾️ Download transcript

Summary

Original Release Date: 08/29/2022
 
On today’s show we’ll discuss a classic empty room – an opportunity ignored by most investors. In this case, we dive into the investment case for Venezuela, a non-starter for pretty much every institution because of the country’s autocratic political regime, sanctions, and headline risk. But alongside those known risks are the potential for significant rewards.

Rodrigo Bitar is the Co-Founder and Managing Partner of 3B1 Partners, the leading private equity fund making growth investments in Venezuela. 3B1 invests in high-quality companies with leading positions in basic industries, while looking to capture a change in macroeconomic conditions in the country.

Our conversation covers Rodrigo’s upbringing in Chile, professional background, and investment opportunity in Venezuela. We discuss Venezuela’s sanctions, economic contraction, and dollarization of the economy. We then turn to investing in the country, including sourcing, due diligence, and an example of a recent transaction. We close with a discussion of the upside and risks to investing in Venezuela.

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Show Notes

(3:18) Rodrigo’s background
(6:50) Family dynamics
(10:13) Investible assets in Venezuela
(12:03) Impact of Russian oil restrictions
(13:38) Surviving economic turmoil 
(17:27) Private vs. public markets in Venezuela
(19:31) Identifying companies 
(21:51) Due diligence process 
(23:49) Assessing valuations 
(25:28) Risks unique to Venezuela 
(28:09) Conversations with potential investors
(32:05) Closing questions 

Transcript

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0:00.0

Capital allocators is brought to you by my friends at WCM Investment Management.

0:07.5

To outperform the markets, you have to do something differently from others.

0:11.9

In my 30-something years investing in managers, there may be no one I've come across who does that as clearly and as well as WCM.

0:20.0

I've seen it up close as an investor in their

0:22.3

international growth strategy for the last five years. WCM is a global equity investment manager

0:28.9

majority owned by its employees. They believe that being based on the West Coast, away from

0:34.7

the influence of Wall Street Groupthink, provides them with the freedom

0:37.9

to live out their investment team's core values, think different, and get better.

0:43.5

As advocates of integrating culture research into the investment process and advancing

0:48.3

wide moat investing with the concept of moat trajectory, WCM has delivered differentiated returns while building concentrated

0:56.2

portfolios designed to stand out from the crowd.

1:00.2

WCM is committed to defying the status quo by dismantling outdated practices, believing

1:06.2

in the extraordinary capabilities of its people, and fostering optimism to inspire each individual

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to become the best version of themselves. To learn more about WCM, visit their website at WCMinvest.com.

1:21.3

And tune in to this slot on the show to hear more about WCM all year long.

1:26.9

This testimonial is being provided by Ted Sides and capital allocators who have been

1:30.2

compensated a flat fee by WCM.

1:31.9

His payment was made in connection with capital allocators' testimonial and production

1:34.4

of podcasts, and does not depend on the success or level of business generated.

1:37.7

The opinions expressed are solely those of capital allocators and may not reflect the opinions

1:40.5

of others.

1:41.1

Investing involves risk, including the possible loss of principle.

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