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Alternative Market Briefing

Sagil’s LatAm fund up 0.6% YTD, manager concerned over region’s growth as China plans to tighten monetary policy

Friday, February 12, 2010

From Sagar Chakraverty, Opalesque Asia:

Sagil Capital, a London-based fund manager, is exclusively focused on Latin America through its Sagil Latin American Opportunities Fund, which achieved a positive return of 0.6% in Jan-10, and 15.6% since inception in July-09.

Sagil said that the MSCI Latin America index went down 8.9% in January, which revealed the first clear sign of investors’ anxiety in the last twelve months as Latin America was hit hard.

While the HFRI Latin America hedge fund Index was down 3.67% in January-10, the Eurekahedge Latin America hedge fund Index was up 0.9%. For 2009, these two indices returned 46.81% and 26.12% respectively.

According to Sagil, the dilemma that investors face when it comes to investing in Latin America is how to enter these markets, whether through long-only funds, or through a long-short strategy, which would be better from an investor’s risk and return point-of-view. Investors are also baffled on how, in Latin America, long-short managers differ from long-only managers.

Concerns over China’s tightened monetary policy According to Sagil’s fund managers, China’s plan to tighten its monetary policy is the first and foremost concern out of all the concerns for Latin America because China’s extraordinary demand for commodities has been a major driver behind Latin America’s growth in recent years from 2006 onwards.

According to the OECD Observer ......................

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