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Komfie Manalo, Opalesque Asia:

Brazilian hedge fund managers are wary of Corralito-type regulations and have become so sceptical about the future of Brazil that they invest offshore to protect their investments, said George Wachsmann, a partner with GPS Investments, the largest independent wealth manager in Latin America, during the recent Opalesque Brazil Roundtable .

"They (local fund managers) are afraid of a Corralito type regulation here in Brazil, so they want to send money offshore so as not to be cut in the middle," Wachsmann said.

Corralito is the informal name given to the economic measures taken in Argentina at the end of 2001 by Minister of Economy Domingo Cavallo in order to stop a bank run, and which were fully in force for one year. The measures almost completely froze bank accounts and forbade withdrawals from U.S. dollar-denominated accounts.

Wachsmann added that feeder structure would be a smart choice because it would bring money to a master fund locally that he believed will not taxed in Brazil.

He went on to say, "I think that interest from the managers' side in setting up offshore structures exists and is growing, but the more pressing and tangible demand is coming from Brazilian investors who want to invest their money offshore, and not just in funds. In other words, there is not ......................

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