In a joint study conducted by Spectra and Cerralvo, search funds continue to gain strong momentum across Latin America, consolidating the region as one of the most active globally for this investment model. In 2024 alone, 24 new funds were raised, and additional 10 remained in the fundraising stage. Since the first recorded Latin American search fund in 2008, the region has experienced 59 acquisitions and 14 exits (we are adding three exits that occurred in the first semester of 2025), eight of which occurred in the past four years, despite a challenging macroeconomic backdrop marked by rising interest rates and limited IPO activity.
As of year-end 2024, 169 search funds have initiated the capitalraising process. Among these, 84 have completed the search phase, resulting in 59 acquisitions and 25 concluded searches without a deal. Currently, 48 funds are actively searching, 10 are still fundraising, and 27 were unable to raise capital and closed. Notably, 69% of those that completed the search phase resulted in an acquisition.
Brazil and Mexico remain the dominant players in the region, though Colombia, Chile, and Peru have shown increasing activity. Mexico led the early wave, while Brazil has taken the lead in more recent cohorts. The recent surge in new funds and geographical diversification highlights the growing maturity and regional expansion of the search fund ecosystem in Latin America.
The profile of search fund entrepreneurs is evolving. There is a noticeable rise in solo searchers, who now represent 78% of the 2023– 2024 cohort, up from 41% in 2017–2018. Simultaneously, the share of searchers with non-MBA backgrounds increased to 51%, compared to just 23% in earlier cohorts. A growing number of experienced operators and ex-founders are also reshaping the demographic in the region.
Acquisition structures reflect the financial realities of the region. Debt represents a median of 36.5% of deal value and earn-outs, used as a flexible alternative to financing, account for a median of 8.2%. These mechanisms help balance risk and return between sellers and buyers. Meanwhile, the financial fundamentals of acquired companies have improved: EBITDA margins slightly increased to 34% and EBITDA growth rates at the time of acquisition reached 25%.
Returns have remained robust. The overall ROI stands at 3.1x, with an IRR of 28%. Even when excluding top-performing outliers, the asset class continues to deliver attractive returns. Among acquisitions, 87% have resulted in gains with 29% of the deals delivering more than 5x.
Finally, partnership-led search funds have outperformed solo-led ones, particularly in mitigating downside risk. While 26% of solo-led funds ended up in losses, none of the partnered funds reported a loss. Furthermore, 26% of solo funds and 29% of partnered funds are achieving returns above 5x.
Latin America is positioning itself as a fertile ground for entrepreneurial investors, supported by diverse founders, disciplined acquisitions, and resilient returns, even amid economic volatility. The outlook remains optimistic, with promising opportunities ahead for both investors and searchers.
Search funds kept the momentum in Latin America, with 24 new funds raised in 2024, and other 10 funds ending the year in the fundraising phase (Figure 1). It is undoubtedly one of the most vibrant markets globally. Since 2008, when the first recorded search fund in the region was raised, there have been 59 acquisitions and 14 exits.
Although search funds in Latin America have a history of over 15 years, a notable wave of exits has only emerged recently, with ten occurring in the past four years. Remarkably, these exits took place amid a tough financial environment characterized by subdued IPO activity and rising interest rates following the global Covid pandemic. This underscores the strength of the Latin American market, where a searcher can raise capital, acquire, and exit a company regardless of broader market conditions.
Figure 1: Search Fund by activity year
A total of 169 search funds have initiated the capital-raising process until 2025 (Figure 2). Of these, 84 have completed the search phase, resulting in 59 acquisitions and 25 closures without a deal. To date, 14 successful exits have been recorded. Currently, 48 funds are actively searching for a target, 10 remain in the fundraising stage, and 27 were unable to raise capital and closed.
Figure 2: Search Funds by status
Mexico and Brazil dominate the region, together accounting for most funds (Figure 3). While Mexico led the early years, Brazil has experienced a sharp rise in recent cohorts and now slightly surpasses Mexico in total number of search funds. Other countries with notable, though smaller, activity include Colombia, Chile, and Peru. The growing diversification across countries and the surge in new funds formed in 2023–2024 reflect the increasing maturity and expansion of the Latin American search fund ecosystem.
Figure 3: Latin America Search Fund by country and year of formation
Exhibit 1 highlights recent changes in the profile of search fund entrepreneurs in Latin America. While the median age at the start of the search has remained in the low 30s, there is a growing presence of older searchers, 18% of the 2023–2024 cohort are over 40. Additionally, there has been a significant increase in non-MBA backgrounds: 51% of recent searchers launched their funds without an MBA, up from 21% in the previous cohort. Furthermore, 31% had more than three years of post-MBA experience, indicating that many are entering the search fund path later in their careers or coming from alternative educational or professional trajectories.
Exhibit 1: Principals’ background
One of the most recent trends is the consistent rise of operators, professionals with hands-on experience in day-to-day business management, who now represent 38% of the 2023–2024 cohort, the highest level recorded to date (Exhibit 2). In contrast, the share of individuals with private equity or venture capital backgrounds has dropped significantly, from 27% in 2013–2014 to just 8% in the most recent cohort. Former founders accounted for 18% of recent searchers, while the proportion of consultants has remained relatively stable over time. Meanwhile, professionals with finance backgrounds, once the dominant group, have declined from 50% pre-2013 to 20% in 2023–2024.
Exhibit 2: Professional background
Solo searchers make up 78% of the 2023–2024 cohort—up sharply from 41% in 2017–2018. This marks a clear shift away from the previous prevalence of partnership-led searches. Simultaneously, the amount of initial capital raised has become more diverse. While solo searchers have maintained relatively stable funding levels, reaching a median of US$450,000 in 2023–2024 and partnered searchers with a median of US$700,000 (Exhibit 3).
Exhibit 3: Search Fund metrics
Brazil and Mexico follow distinctly different salary structures (Exhibit 4). In Brazil, annual salaries range from US$59,000 to US$180,000, while in Mexico they are narrower, ranging from US$100,000 to US$135,000, but with a higher median value.
Exhibit 4: Search Fund salary per searcher per year (US$ thousand)
Mexico leads with a significant number of acquisitions, especially from funds formed between 2017 and 2020, highlighting its early leadership and sustained momentum in the region (Figure 4). Brazil follows, with steady activity across recent cohorts, particularly between 2017 and 2022. Chile, Peru, Colombia, Paraguay, and the Dominican Republic also show acquisition activity, though at a smaller scale, reflecting the gradual spread of the model to other markets.
Figure 4: Latin America Search Fund acquisitions by country and year of formation
Services is the most prominent sector, with a consistent number of acquisitions across all periods and a peak of 8 in 2023–2024. Software has also relevance, despite of a smaller number in the last cohort. Other industries such as Healthcare Providers, Manufacturing, Education, and Tech-enabled Services appear more sporadically, with lower but still notable activity (Figure 5).
Figure 5: Industries of acquired companies over time
Earn-outs have emerged as a common alternative to debt financing in Latin American search fund acquisitions. In the 2023–2024 cohort, debt accounted for a median of 37% of deal structures, while earn-outs represented 8% (Exhibit 5). These figures align with recent trends, in which earn-outs have consistently comprised around 10% of total transaction value—providing a flexible mechanism to align buyer and seller interests while mitigating financing constraints.
Exhibit 5: Acquisition structure by acquisition date
Debt plays a central role in the acquisition structure and Exhibit 6 illustrates the cost of debt at entry across cohorts. The figures show significant variation by deal and vintage, reflecting different economic environments in which they occurred. While the median cost ranges between 10% and 13%, difference between minimum and maximum reached about 10% in 2019–2020 and 2021–2022. The 2023–2024 period shows an outlier, with one deal securing a 0% interest sellers’ note. Looking at current debt costs, the tightening credit environment is evident, as companies are facing materially higher interest rates.
Exhibit 6: Cost of debt by acquisition date
Exhibit 7 outlines key financial and operational metrics for companies acquired by search funds over time. The median search duration has remained consistent in recent years, typically ranging between 19 and 25 months. While purchase prices have varied, the median in 2023–2024 was U$17.4 million. Recent acquisitions reflect healthier financial profiles: EBITDA margins increased to 34% in the latest cohort, EBITDA growth at the time of purchase reached 25%. Revenue growth rates remained at 20%. Despite these improved fundamentals, valuation multiples remained relatively stable, indicating continued discipline in acquisition pricing.
Exhibit 7: Statistics for acquired companies
The power ratio at acquisition has remained relatively stable across vintages, with median values consistently ranging between three and four. This pattern highlights a degree of resilience in acquisition structures, regardless of market conditions. Exhibit 8 illustrates that although there are fluctuations at the extremes the central tendency remains contained.
Exhibit 8: Power ratio at acquisition
Among all surveyed search funds that fundraised, 69% resulted in an acquisition, while the remaining 31% concluded without closing a deal (Figure 6). Of the funds that have acquired a company, 87% are generating positive returns and 12.8% incurred losses. Within the group of positive outcomes, 3% delivered returns above 10x, 27% achieved between 5–10x, 35% reached 2–5x, and 35% returned between 1–2x. Among the loss-making deals, 60% were partial losses, while 40% were total losses.
Figure 6: Percentage of Search fund in each phase of the search fund life cycle
Panel A of Figures 7 and 8 present the ROI and IRR of Latin American search funds, covering both realized and ongoing investments. Overall, the ROI (Figure 7) stands at 3.1x, while the IRR (Figure 8) reaches 28.1%. These results are influenced by a few top-performing outliers; when the five highest returns are excluded, the ROI adjusts to 2.5x and the IRR to 23.4%.
Latin America’s exchange rates are volatile, so we compute ROI and IRR assuming the entry FX rate in a search fund is adjusted solely by the inflation differential between the United States and the investment’s country. Panel B of Figures 7 and 8 shows ROI up to 3.2x and IRR up to 30.9%.
Figure 7: ROI of Latam Search Funds
Panel A: ROI in US Dollars
Panel B: ROI in US Dollars – adjusted for inflation differentials
Figure 8: IRR of Latam Search Funds
Panel A: ROI in US Dollars
Panel B: ROI in US Dollars – adjusted for inflation differentials
The returns of both exited and currently operating companies, segmented by year of acquisition, show that IRRs remained relatively stable across cohorts, averaging around 30%, despite variations in holding periods and ROI (Figure 9).
Figure 9: IRR and ROI by year of company acquisition
Figure 10 compares investor returns between search funds led by solo entrepreneurs and those led by partnerships. The data indicates that partnerships marginally yield better outcomes. While 26% of solo-led funds resulted in a loss, none of the partnered funds experienced a complete loss yet. Additionally, 60% of partnered funds achieved returns above 2x, compared to 53% for solo-led funds. These findings suggest that collaborative leadership in search funds may enhance overall performance and help mitigate downside risk.
Figure 10. Investor ROI by partnership status
The conclusion from this study is clear: the Latin American search fund ecosystem has not only entered a new phase of maturity but also demonstrates remarkable regional expansion and resilience. The market’s dynamism is evidenced by the 24 new funds raised in 2024 alone, with another 10 still in the fundraising phase by year-end. Since the model’s inception in the region, 169 funds have initiated the capital-raising process, leading to 59 acquisitions and 14 exits to date.
This model has proven its adaptability, thriving even in challenging macroeconomic environments. A testament to this is that six of the nine total exits occurred in the last three years, a period marked by rising interest rates and limited IPO activity. Simultaneously, the entrepreneur’s profile is undergoing a significant transformation, signaling the model’s broadening appeal and accessibility. Recent trends highlight a sharp increase in solo searchers, a growing prominence of professionals with operational backgrounds, and a surge in ex-founders without an MBA.
In acquisitions, pricing discipline is being maintained with stable valuation multiples, even as the financial health of acquired companies improves, evidenced by a 25% EBITDA growth rate at the time of purchase. Deal structures also reflect local realities, with the strategic use of earn-outs representing a median of 8.2% of recent transactions. The ultimate outcome for investors remains robust, delivering an aggregate ROI of 3.1x and an IRR of 28.1%. Notably, funds led by partnerships have marginally outperformed their solo-led counterparts, mitigated downside risk and increased the likelihood of achieving returns above 5x.
Looking ahead, the combination of increasingly diverse searchers, sustained discipline in acquisitions, and consistent returns supports the thesis that the search fund model is here to stay and expand. As the ecosystem continues to evolve, Latin America is solidifying its position as one of the most dynamic and promising markets for search funds globally, offering compelling opportunities for both entrepreneurs looking to acquire and operate a business and investors seeking attractive returns.
