Engeform, Galapagos raise R$190M fund to bet on Brazil's PPP boom
Engeform Gestão de Recursos and Galapagos Capital have closed a R$190 million fund focused on social infrastructure, structured as a tax-exempt FIP-IE for individual investors. It gathered around 100 investors, including Galapagos clients and Engeform executives.
The fund targets public-private partnerships (PPPs) in education, health, and housing, aiming for returns of IPCA + 15% a year over a 15-year term. It prioritises assets of low operational complexity, with a mandate to hold majority stakes or lead governance.
The fund launches with a 50% stake in São Paulo's Schools PPP, via a special-purpose vehicle formed with manager Kinea after winning the 2024 auction alongside Engeform. The project covers 17 schools across 14 municipalities; eight are already delivered, with classes starting in August.
Early delivery matters: the public sector begins paying once a school is ready for students. That advance cash flow lets managers fund construction of units still in progress or enter new concessions.
Brazil's PPP market hit a record in 2025, with 75 auctions on the B3 and R$243.8 billion in investments, up from 64 auctions and R$180 billion in 2024. In the first quarter, the B3 logged 18 auctions and R$42.4 billion — more than 40% above the same period a year earlier.
Luciana Improta, Engeform's investment director, said the fund can enter up to three more projects. "The great point of the thesis is being majority, or majority within governance," she said.
The fund is negotiating a new housing PPP, involving the potential purchase of an auction winner. Thomas Averbuck, partner and executive director of private equity at Galapagos, said opportunities exist among companies struggling to meet concession commitments.
"We'll look at both: the auction and, eventually, opportunities in the secondary — other players that have already won concessions and, at some point, want to exit," Averbuck said.
This is the second fund the two managers have built together, pooling capital to widen their reach. With Engeform Engenharia on hand to execute the works and a record pipeline of Brazilian concessions, they are wagering that social infrastructure has become a durable, tax-advantaged asset class.
Read more: NeoFeed
Image credit: U.S. Army Corps of Engineers Savannah District
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