Good evening. Muy buenas noches. I was honored when Jesus Chavarria asked me to make tonight's keynote address and I am delighted to be here tonight.
As you may know, Palladium is the largest Hispanic owned private equity fund in the country with over $500 million in committed equity capital.
According to Hispanic Business, we ranked #5 in the Hispanic Business 500 with revenues in excess of $800 million and more than 8,000 employees in our six portfolio companies.
Tonight's topic of discussion is financing the next demographic wave.
The growth and prosperity of the U.S. Hispanic population is causing the most profound and fundamental changes in the national economic and political landscape since World War II.
The entrepreneurs being honored this evening and the buzz, electricity and elegance of the audience here tonight are a clear manifestation of those changes.
My goal for tonight's address is to provide the entrepreneurs in the room with an overview of financing options available to them, to discuss private equity in detail, and to provide some insight into what private equity firms and venture capitalists look for in potential investments.
First and Foremost the demographic trends that Jesus, Juan and others have described tonight are incredibly powerful creators of wealth and disposable income.
The data is real. The growth is real. The people are real. We are very real. We buy food for our growing families, we clothe and educate our children, we buy soap, cars, homes, healthcare and stocks.
With projected growth in purchasing power in excess of 9% per annum, the U.S. Hispanic market presents investors with growth characteristics of "Emerging Markets" within the stable currency and political climate of the United States. The best of both worlds.
This beneficial risk/reward profile has attracted billions of dollars of investment focused on this market from around the world.
The confluence of the demographic trends and investment creates tremendous opportunity for entrepreneurs and middle market companies.
Hispanic Business defines middle market companies as those businesses with sales between $5 and $50 million.
My firm targets companies with revenues between $25 and $500 million, depending on the industry.
At Palladium we have identified four principal themes for investing in the U.S. Hispanic Market.
We look for investment opportunities across 4 general categories:
1. Companies targeting Hispanic youth and family
2. Underserved sectors such as financial services and healthcare
3. Culturally targeted products such as food and media
4. What may be the most exciting, the "Hispanization" of U.S. Society.
The typical U.S. Hispanic is young and comes from a large family.
Nearly 20% of all Americans under age 30 are Hispanic.
Every other "new" American by birth or immigration is Hispanic.
The population histogram on the left shows just how young the Hispanic population really is compared with the non-Hispanic population. These demographics are extremely appealing for retailers, banks, advertisers and consumer product companies because Hispanics out spend the Non-Hispanics on a per family basis.
The flip side of the fact that Hispanics out spend non-Hispanics on consumer products, including food and clothing, is that the typical Hispanic family severely under spends on two critical areas: health care and financial services. We believe that real opportunity exists in both of these sectors as Hispanics begin to accumulate wealth.
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