Opalesque Industry Update - Financial Risk Management (FRM), a global hedge fund investment specialist, has established a strategic partnership with Itajubá International, a Brazilian alternatives specialist, to provide institutional investors in Brazil with access to global best of breed hedge funds. |
As part of this relationship, FRM and Itajubá Investimentos, a Brazilian distributor owned by partners of Itajubá International, have recently launched the only Brazilian mutual fund which invests the majority of its assets in a global portfolio of offshore hedge funds.
FRM Global Hedge Fund FIM, when registered with the CVM (Brazilian Securities and Exchange Commission), will be available to super qualified Brazilian investors. It will invest the majority of its assets in an offshore fund managed by FRM which contains over 30 international CTAs and hedge funds.
The Fund’s objective is to produce positive return streams which are uncorrelated to Brazilian and international markets, providing institutional investors with a new option for diversifying their portfolios and increasing risk adjusted returns. In addition, the Fund will be fully hedged in Reais, allowing investors to benefit from the interest rate differential between Reais and US Dollars.
Marco Zanuso, Director at FRM responsible for Latin America stated: “Itajubá and FRM share the same philosophy, that alternative investments can bring significant value to institutional portfolios because of their diversification benefits.
“FRM has a long history of working with institutional investors around the world, particularly when they are in the early stages of exploring alternatives and need to build their knowledge on the sector prior to making allocations. We have a long term commitment to Brazil and look forward to working with our local partner Itajubá to serve this important and growing market.”
Leonardo Camozzato, Partner at Itajubá Investimentos, stated: “Although Brazil is among the 10 largest pension fund markets in the world, Brazilian pension funds are the only ones in this target group who overall have not diversified their portfolios through international and alternative investments.
“Up to this point, high local interest rates have enabled pension funds to meet their return targets. However, as these rates fall, pension funds will need to re-shape their portfolios and look for more profitable alternatives to successfully fulfill their obligations. Recent changes in Brazilian regulations now allow for up to 10% of pension assets to be invested overseas, and this new fund is designed to provide access to global hedge fund return streams which are independent of local markets.”
When registered with the CVM, FRM Global Hedge FIM will be managed by BNY Mellon Asset Management, administered by BNY Mellon Financial Services and distributed by Itajubá Investimentos. The fund will be available to Brazilian super qualified investors, including family offices, private banks, local fund of fund managers and pension funds.