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Alternative investments account for 21% of the Brazilian funds market, up from 13% since December 2020, but authorities see further growth ahead in private markets.
Representatives from Brazil’s trade group and regulator were speaking at the ALFI Global Asset Management conference in Luxembourg to attract investors and partners to Latin America’s biggest funds market, worth $1.65trn.
“In Brazil the regulator is not far from the market, we are side by side,” said Marco Antonio Velloso De Sousa, Director of Institutional Investors Supervision at CVM, Brazil’s equivalent of the SEC. “Brazil is wide open for the foreign investor.”
He described CVM Resolution 175 reforms to the fund investment industry designed to bring Brazilian funds in line with global standards.
Ana Flavia Lopes, Head of International Affairs at the Brazilian Financial and Capital Markets Association (ANBIMA), said there was room to grow further on the alternatives side.
Private equity funds can only invest a third of their portfolio abroad and that will increase to 100%, and access will soon be possible via ELTIFs.
Private market growth opportunities were highlighted more than hedge funds, where the domestic industry had a record $57bn in outflows last year amid muted performance.
De Sousa said the regulator was focused on supervision over liquidity and leverage in the hedge fund sphere.
Four of the AFI 500 list of leading hedge fund managers are based in Brazil.