FOREIGN TRADE: Capital for South America

Six months ago, at the Inter-American Investment Conference in New Orleans, Shipping Tycoon Rudolf Hecht suggested the formation of a U.S.-sponsored company to provide capital for Latin American companies by buying their securities. Last week Pennroad Corp., TIME Inc. (which publishes editions of some of its magazines in Latin America) and South American Gold & Platinum Co. announced that they are forming just such an investment company called the Interamerican Capital Corp. It will be the first big-risk capital corporation set up “for the primary purpose of making diversified, direct commitments” in Latin American business.

The company seeks ultimately to raise $10 million. Of the nominal organizing capital, Pennroad will pay in 40%, TIME 40%, and South American Gold, which will manage the company, 20%. Interamerican Capital will buy stocks, convertible bonds and other securities of promising South American and Caribbean area enterprises, new or old. Despite political risks, the opportunities look promising. Latin America’s industrial growth rate in the past 15 years has almost paralleled that of the U.S.; some countries, e.g., Brazil, Colombia, Venezuela, have even topped the U.S. rate.