What does Central America mean to outsiders? A land of volcanoes, stunning scenery, great natural wealth, the enigmatic ruins of ancient civilisations, perhaps? Or a blood-soaked recent history of harsh poverty and exploitation, revolutions crushed by brutal dictatorships, endless civil wars uprooting communities and the gang culture of the Maras? Yet for some investors, Central America is also a land of promise. Take a look behind the stereotypes, say the region’s private equity managers, and there is gold in them volcanic hills.

“We feel there is a great long-term opportunity investing in Central America,” says Kirk Haney, chairman of Cloudbreak Advisors, a Central America-focused boutique firm. “There has been so much progress in the last 25 years; progress in terms of democracy, the development of free markets and enforcement of the rule of law. The region is not considered a tier one or tier two market, but that means the opportunities are potentially much greater for investors who seize them.”

With international capital now comfortably ensconced in Brazil and Mexico, and the next tier of Latin American economies (Chile, Argentina, Peru and Colombia) developing private equity apace, the small countries in the Mesoamerican isthmus could be the next destination for private capital...

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