The Arrival of Hedge Fund Investment in Brazil

Nov. 17, 2010 - PRLog -- Hedge funds are the latest to appear on the long list of investment opportunities in Brazil. The largest funds have reportedly earmarked Brazil as a major area for expansion at a time when Brazil’s Finance Minister predicts 7.5% growth.
New York and London are the world’s top areas for managers of hedge funds in excess of US$1 billion, but Brazil and Asia (mainly Hong Kong and Singapore) are new favourites. According to Hedge Fund Intelligence, the industry’s largest database, Brazil is now home to five over-a-billion hedge funds compared to just one fund this time last year.
For the Financial Times (FT), the marked increase in the hedge fund presence in Brazil is because managers like “to be closest to the markets generating the biggest returns”. This reflects the findings in two recent surveys by Bloomberg and HSBC, both of which establish Brazil and Latin America as the best places for returns on investment.
The FT claims that the largest UK and US hedge funds are extremely interested in Brazil, an area they have “earmarked for expansion”. The British hedge fund and the world’s fourth largest, Brevan Howard is set to open an office in São Paulo very shortly while the US giant and second largest globally, JP Morgan’s Highbridge is negotiating to buy the largest hedge fund in Brazil, Gávea.
The enthusiasm for Brazil among hedge fund managers mirrors the rise of emerging markets generally. Emerging markets are showing bigger and stronger economic results all round and in their search for better returns, hedge funds are moving to new areas.
Obelisk believes that Brazil is likely to be a safe bet for hedge fund managers, particularly over the next decade as economic growth consolidates on the back of commodity exports and a booming domestic market. The latest economic growth forecasts for Brazil are extremely encouraging.
Speaking to investors in New York, the Finance Minister, Guido Mantega said he is expecting an increase of 7.5% in Brazil’s GDP this year. For Mr Mantega, “Brazil is experiencing a sustainable expansion and conditions are in place for 5.5% to 6% growth over the next four years”. He emphasised that inflation is in check and that investment in Brazil is high – “investment today is growing almost three times faster than the economy,” he said.
For Obelisk, the arrival of the world’s largest hedge funds in Brazil confirms still further that Brazil is a serious investment destination and one that investors globally are increasingly keen to get into.

Obelisk offers select investment opportunities in Brazil and gives investors security, profitability and diversity thanks to a combination of close attention to our clients' investment requirements and high quality in-house research and analysis.

For more information on investment in Brazil and to find out about Obelisk’s latest projects there, contact us on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

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Obelisk offers select investment opportunities in Brazil and gives investors security, profitability and diversity thanks to a combination of close attention to our clients' investment requirements and high quality in-house research and analysis.