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Laxman Pai, Opalesque Asia: The number of active Brazil-based hedge funds increased significantly over the last few years - in Q1 2023, 653 funds are active in the region, almost doubling since 2020 from 332, said a study.
Preqin's top-level hedge fund index for the region calculated an 8.7% annualized five-year return for all hedge funds based in Brazil. This is slightly ahead of the Preqin global hedge fund benchmark return of 7.6% over the five years ending in December 2022.
According to the Preqin Territory Guide Alternatives in Brazil 2023, global macro strategies have performed particularly well. These funds, which trade on macroeconomic factors such as interest rate changes, the resulting currency movements, and equity market swings, have all been very active in Brazil, investing globally as well as locally.
Meanwhile, nearly every major asset class has seen flat-to-negative assets under management (AUM) growth over the past five years, with overall AUM falling from $32.6bn in 2017, to $29.8bn in June 2022, failing to reach or surpass its 2014 high of $35.6bn.
Inflation and high-interest rates defined the $1.6tn Brazilian economy in 2022. The country's central bank, Banco Central do Brasil (BCB), reported inflation peaking at 12.3% year-over-year growth in April, while policymakers raised the base SELIC benchmark interest rate by 260 basis points to 11.8%.
The $29.8bn in overall private capital AUM in Brazil, estimated by Preqin as of June 2022, ...................... To view our full article Click here
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