Few things have been hotter in the world of finance lately than Brazil and hedge funds. That country’s robust economy, high interest rates and strong currency have attracted huge inflows of capital, while the hedge fund industry has recovered from its losses during the financial crisis to set all-time highs for assets under management. Hedge funds, however, are having a hard time. Multimercados, as hedge funds are called in Brazil, have slumped this year after a decade of phenomenal growth. Assets under management of multimercados were up just 2 percent on June 3 from the end of 2010, at $248 billion, compared with growth of 12 percent in the same period for the country’s entire fund management industry, to $1.13 trillion, according to the Brazilian Financial and Capital Markets Association, known by its Brazilian acronym Anbima.
This being Brazil, of course, the suffering is relative. The hedge fund industry has continued to grow this year, but the pace pales in comparison with the dramatic expansion of recent years. Multimercado assets grew by 26 percent in 2010 and by 70 percent in 2009, according to Anbima. The recent sluggishness also stands in contrast to the vibrancy of the overall money management industry, whose assets are increasing at a healthy double-digit pace this year.
BB Gestão de Recursos, the fund management arm of state-owned Banco do Brasil, continues to extend its lead at the top of the ranking. The firm’s assets grew by 36.5 percent during the period, to $239.3 billion at the end of March. There is little change in the overall order, although Credit Suisse, whose Credit Suisse Hedging–Griffo Asset Management unit is a leading hedge fund manager in Brazil, rises one place to tenth on the list, thanks to a 39.4 percent rise in assets, to $19.3 billion.
How The Ranking Was CompiledInstitutional Investor’s fourth annual ranking identifies Brazil’s top 20 fund managers by assets. São Paulo–based Researcher Milena Mazzola Moreti compiled the ranking under the guidance of Senior Editor Jane B. Kenney, using data from questionnaires the institutions filled out themselves. II staff refined these data through follow-up faxes, e-mails and telephone calls. All figures are in millions of dollars, as of March 31, 2011, for this year and December 31, 2009, for last year. Where necessary, values were converted from reais using the exchange rate on the respective date.