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Bloomberg

Best hedge fund in Brazil strengthens local equity bet on rebound

(Bloomberg) – One of the best performing hedge funds in Brazil has stepped up its bet on local stocks, a sign of growing confidence in the country’s post-pandemic rebound. CSHG Verde FIC FIM fund which has returned on average 24% per year over the past two decades, it’s a bet that Latin America’s largest economy will begin to emerge from the recession of the virus. The fund has reduced foreign holdings and now has more than 25% of its portfolio allocated to Brazilian stocks, one of the highest percentages in the past eight years, said Pedro Sales, partner at Verde Asset Management, responsible for management of local equity investments. The roll-out of vaccination and the easing of measures to curb the spread of the virus should pave the way for better growth prospects, according to Sales. “As social distancing goes away, you will have a very strong recovery,” he told Bloomberg. News.Verde is among a growing number of asset managers and banks increasingly optimistic about Brazil’s growth. The country has been hit hard by the Covid-19 pandemic, with the second highest death toll in the world, and has struggled with vaccination – only 9.6% of the population is fully vaccinated so far against around 38 % in the United States, according to Even So, recent economic data has exceeded estimates and companies like UBS Group AG and Credit Suisse Group AG have upped their growth forecasts as states began to lift travel restrictions and new cases are slowly receding from their peaks. Viruses and Buy Stocks: Market Espresso “Getting back to normal won’t necessarily be a linear process, and we might still see bumps ahead,” Sales said, adding that a third wave of Covid-19 infections is the biggest risk that could derail optimism. Verde is also concerned about public spending. In his monthly letters to clients, the asset manager denounced the budget woes, with the country spending more money than almost any other developing country to cushion the virus. Brazil’s balanced budget will still require many adjustments in the future, said Sales.Verde Asset Management was created by fund manager Luis Stuhlberger in 2015, with support from Credit Suisse. The company has become the largest independent asset manager in the country, overseeing around 54 billion reais ($ 10 billion). Its flagship fund, originally created by Stuhlberger while working at Hedging Griffo – later acquired by the Swiss bank – has returned over 19,000% in local currency since its inception in 1997. benefit from a rebound in Brazilian equities, which fell slightly over the year in dollars, against an 11% advance for the S&P 500 index. Earlier this month, the largest US-listed ETF focused on Brazilian stocks received the second largest weekly inflow since the start of the pandemic, according to data compiled by Bloomberg. In addition, global investors poured R $ 8 billion into local stocks this month to May 18. Manufacturer Suzano SA and paper packaging producer Klabin SA The company recently added Lojas Renner SA, a clothing retailer that raised around R $ 4 billion last month that could be used for potential acquisitions. Verde also participated in the initial public offering of GetNinjas SA, a Brazilian digital platform that connects professionals, from psychologists to personal trainers with potential clients. © 2021 Bloomberg LP



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