Latin America

Latin America represents a very attractive opportunity to expand our regional scope and provide capital and support to growth companies. In 2007, General Atlantic made two major investments in Latin America: MercadoLibre, the largest online consumer trading website in Latin America, based in Argentina; and the Brazilian Mercantile and Futures Exchange (BM&F), Brazil’s futures exchange, based in São Paulo. We have opened an office in São Paulo to support these portfolio companies and to identify other market leaders with whom GA will seek to partner. Our main focus will be in Brazil, but we will also be looking at major markets in Latin America that exhibit stable political and economic environments for investment and growth opportunities.

We view the following characteristics to be key drivers of the opportunity in Brazil:

Large and growing economy - Brazil possesses strong fundamentals for growth such as land, raw materials, and favorable demographics.

Improving macroeconomic fundamentals - Includes controlled inflation, declining real interest rates, and an overall less risky economy.

Expanding middle class and relatively young population - Inflation control and macroeconomic stability have resulted in better income distribution, thus expanding the middle class and bringing new customers to the market. In addition, the population under 25 years-of-age represents over 50% of the population, compared to less than 30% in Europe.

Meaningful reform measures by the government are producing results - These reforms include introduction of payroll deduction loans, improved bankruptcy rules, and more favorable real estate regulations.

Expected sovereign upgrade to investment grade in 2008 or 2009 - Moody’s and S&P have been upgrading Brazil’s sovereign debt over the past five years as the country’s economic fundamentals have continued to improve.

The opportunities across Latin America are driven by a number of factors. The Latin American economy has rebounded dramatically over the past few years, emerging from the global recession at the beginning of the decade. GDP for the region is expected to grow over 4.5% in 2007, compared to a world average of 3.5%, U.S. GDP growth of less than 2%, and average European growth rates below 3%. GA is aware of problematic issues in Latin American political and economic development, in the past and also in the present, and we are factoring these considerations into our investment process. However, political and economic stability is steadily taking hold in most major Latin American countries and is creating a powerful growth dynamic led most notably by the following countries:

Brazil
— Latin America’s largest market, representing over 30% of total GDP
— Fifth-largest country in the world, by both land mass and population
— Contains 22% of the world’s arable land bordering 10 countries
— One of the few countries in the world that is self-sufficient in oil
— World’s largest producer of sugar-cane, coffee, and oranges

Argentina
— Has one of the most educated populations in the region with the lowest illiteracy rate and the highest university enrollment rate
— Highest number of PC and Internet users per capita in Latin America
— Largest soybean oil producer in the world

Mexico
— Most populated Spanish-speaking country in the world
— Has signed more free-trade agreements than any other country in the world
— Three-quarters of its population lives in urban areas
— One-third of the population is aged 14 years or younger

Chile
— Is the most competitive economy in Latin America (as measured by the World Economic Forum rankings)
— Has the highest level of human capital in Latin America (according to the UN)
— World’s largest producer of copper

GA views the opportunity for investment in Latin America to be driven by the growth in demand for services and goods in the local markets. This will provide positive business dynamics across a diverse set of businesses such as consumer finance, media / telecommunications, Internet, healthcare providers, brokerage services, payment processing, IT services, energy, and infrastructure. In fact, we see strong activity and opportunity in each of our six sector areas of focus.

We look forward to expanding General Atlantic’s presence in Latin America through new investments, in addition to working with our portfolio companies in other parts of the world who may be interested in pursuing business in this region. If you would like to share feedback or introductions to companies and individuals in Brazil and beyond, please contact Rene M. Kern, who is spearheading our Latin American effort.