UPDATE 1-BNDES to spend $1.35 bln to boost Brazil venture-capital markets

Tue Apr 15, 2014 11:58am EDT

(Updates with formal BNDES confirmation throughout)

BRASILIA/RIO DE JANEIRO, April 15 (Reuters) - Brazil's state development bank, BNDES, says it plans to spend up to 3 billion reais ($1.35 billion) on stakes in buyout investment vehicles and share offerings by small- and mid-sized companies to help foster new funding sources in local capital markets.

The program will be carried out mainly by BNDES's investment holding company, BNDESPar, the Rio de Janeiro-based lender said in a statement on Tuesday. About 2 billion reais of the money will go to investment vehicles managed by 12 private-equity and venture-capital firms in Brazil, the statement added.

The remaining 1 billion reais is expected to be spent on share offerings by small companies listed on financial bourse BM&FBovespa SA's Bovespa Mais market, the statement added.

BNDESPar could also help guarantee offerings or lend money to prepare a company to list its shares, lowering costs associated with market risk and corporate governance.

"The initiative ... aims to lure new investors in this market, leverage the deployment of fresh funds to capital spending and strengthen the local private-equity and venture capital sectors in the country," the statement added.

BNDES, which is considered Brazil's biggest source of long-term corporate loans, now has about 2.5 billion reais invested in 34 similar investment vehicles, known in Brazil as "fundos de participaƧƵes".

($1=2.21 Brazilian reais) (Reporting by Silvio Cascione and Guillermo Parra-Bernal, Editing by W Simon and Peter Galloway)