FRM Teams With Brazil’s Itajubá For Fund Launch

Dec 15 2011 | 7:28am ET

Hedge fund investment firm Financial Risk Management and Brazilian alternatives specialist Itajubá International are launching Brazil’s first mutual fund invested chiefly in offshore hedge funds.

Once registered with Brazil’s market regulator, the FRM Global Hedge Fund FIM, will be available to super qualified Brazilian investors. The bulk of its assets will go to an offshore FRM fund of funds, made up of over 30 international CTAs and hedge funds.

The goal is to produce positive returns uncorrelated to Brazilian and international stock markets and provide institutional investors with another option for portfolio diversification. The fund will be fully hedged in reais, allowing investors to benefit from the reais/US dollars interest rate differential.

Leonardo Camozzato, partner at Itajubá Investimentos, said in a statement: “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.”

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.

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