A stellar Wharton team recommended the restructuring of a Chilean salmon company to edge out a competing Kellogg team in the finals of this new event. Drawing more than 60 participants, judges and observers, the first ever Wharton Latin America Private Equity Competition was a resounding success.
A group of second years flawlessly executed this event which placed the Wharton brand top of mind for Latin American private equity professionals and students interested in the field. The competition was structured as a two-round tournament in which teams from top MBA programs presented original and actionable targets to an “investment committee” that was composed of managing partners from numerous PE firms investing in the region. Teams from LBS, MIT, Chicago, Kellogg, Columbia and Wharton presented ideas ranging from a clothing retailer in Brazil to a healthcare roll-up strategy in the Latin American Region. During this round, the teams were split into two brackets that presented to three to four judges each. The judges grilled our classmates and peers in an Iron Chef style Q&A session. Answers such as “I don’t know” or “We didn’t consider that factor” were not acceptable. One set of judges provided feedback to the teams by asking them to stand up in the front of the room like a firing squad. Paradoxically, this was one of the favorite moments for a lot of the presenters. The participants had been welcomed by the organizing committee with pitchers of margaritas and caipirinhas; suddenly they were receiving in-depth feedback in a competitive environment in which you could cut the tension with a knife. Ultimately, a Wharton team and a Kellogg team made it to the final round. The Wharton team composed of Henry Heinerscheid (WG’13), Abel Osorio (WG’12), Juan Gonzalez-Goicoechea (WG’12), and Jose Luis Gonzalez Pastor (WG’12) proposed a buyout of a Peruvian car battery manufacturer, while the Kellogg team also proposed a Peruvian deal, but instead of a poultry producer.
For the final phase, the organizing committee prepared an original case based on an idea from Julio Dittborn (WG’12) of a distressed salmon producer in Chile. While the industry fundamentals seemed attractive, the “fictitious” target had recently faced financial troubles and was highly levered. The Wharton team considered that the equity value was underwater and proposed acquiring the debt of the company to then access the equity through a bankruptcy. The team arrived at this complex recommendation after reading, analyzing and preparing the case for only 90 minutes. The judges were impressed by the level of quantitative and qualitative analysis that the team was able to perform in such a tight timeframe. After announcing the results, one of the winning team members was seen running off with the giant check that was awarded to them.
While all of this was a great success, there were many people that played a big role in making this happen. The organizing team of Sam Abraham (WG’13), Gustavo Cardenas (WG’12), Nicolas Escallon (WG’12), Tomas Gazmuri (WG’12), Carmen Madanes (WG’12) and Ricardo Yunis (WG’12) worked tirelessly starting in October to leverage their personal networks in the region as well as with friends in other schools. Fortunately, the powers that be at Wharton never hesitated to lend a hand in order to ensure the best outcome for the Wharton brand. Kembrel Jones and his team took time out of Winter Welcome Weekend planning to provide us with any Wharton SWAG we needed. The Admissions Office and the Office of Career Services also gave us very nice gifts for our judges. Professor Stephen Sammut gave an official welcome on behalf of Wharton during the breakfast and participated as a judge himself.
While the environment was professional and competitive, all the participants were surprisingly friendly and willing to establish new relationships. The participants were invited to attend the Wharton PE Conference and dinner the day before and others got to know some Wharton favorites such as Sumo Lounge and Pulse after the competition. Some of the participants had pre-existing connections amongst themselves, but after a couple of beers at City Tap, it seemed like everyone had known each other for decades. The organizing committee opened up the competition to the greater Wharton community, which allowed all the participants to really experience networking the way we do it. The competition helped in establishing Wharton as the business school of reference for private equity in Latin America. In the end, all the participants were very happy to have participated in the event and look forward to coming back to Wharton next year to give it another go.
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