In the past two years, many of the largest deals have involved print media, a development Mr. Castro attributes to relatively few barriers to entry compared with the foreign-ownership restrictions in broadcasting. But he also notes a larger strategy behind BBVA's announcement in September that it would buy Laredo National Bank in Texas. BBVA already has shares in Mr. Castro's radio operation along the border as well as Mexican bank Bancomer. "They're buying that bank with footprints in South Texas as an entry into the Hispanic market," he says. "Now they can work [banking] on both sides of the border."
From the entrepreneur's perspective, the need for private equity usually arises when the company reaches a critical point in its development or the owner wants to sell. Mr. Signoret sees "companies that were local and now want to sell regionally. That's a reflection of reaching a critical mass." He also sees CEOs who either want to cash out completely or turn part of the company over to their children.
"Hispanics in the second and third generations are taking over companies," says Mr. Garcia. "They have a more market-oriented approach and are less attached to their company." But "the first step is for the owner of the company to decide [to relinquish] control," Mr. Garcia says. Some buyers want full control, while others will take a minority-ownership stake, but that determination must come early in the process.
Mr. Castro estimates he has signed $250 million in debt and equity capital deals since starting Border Media Partners in 2002. But he admits his company is the exception; most entrepreneurs face limited access to capital.
"Access to capital for Latinos continues to be weak," concurs Mr. Garcia. "But we can bring them capital on public and private markets. Twenty years ago there wasn't a Ramirez & Co. Today people have more choices than a generation ago."
Mr. Castro advises CEOs to begin their search for money with well-heeled friends and relatives. Although Mr. Castro has started three other companies, he raised the first $2 million for Border Media Partners from individual investors. As for the time involved, Mr. Castro says it took him nine months to land the latest $85 million investment. "However long you think it's going to take, double it," he warns.
And Mr. Garcia thinks CEOs should hurry to start the process, given the market's brief window of opportunity. "One thing I can tell you: Right now there is capital chasing deals," he says. "It will be short-lived, it will subside, so people should take advantage of it."