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Top Brazil Hedge Fund Revamps Bets, Seeks New Money After Rout

Top Brazil Hedge Fund Revamps Bets, Seeks New Money After Rout

(Bloomberg) -- One of Brazil’s best-performing hedge funds is trying to lure in new money after its worst month on record.

The XP Long Biased fund, which had been closed for new investors since the first half of 2018, is seeking to raise about 500 million reais ($97 million), according to Joao Braga, the co-head of equities at XP Asset Management.

The move comes after the fund, which has the best return among almost 100 peers in the past five years, posted a 44% drop in March. Brazilian stocks fell 30% last month amid fears over the impact of the coronavirus crisis on global economic activity.

“We are experiencing a great opportunity: few times in my life I’ve seen prices at these levels,” said Braga. He says the previous portfolio was more concentrated in a few names because other stocks were expensive, which isn’t the case anymore. The fund is up 4.9% this month through April 8, versus a 7.7% gain for the benchmark Ibovespa gauge.

Braga and Marcos Peixoto, who co-manage the fund, reshuffled some of their main bets after the slump. They cut back high-profile holdings in retailer Via Varejo SA and health insurer Qualicorp SA, while adding new names including pulp exporter Suzano SA, state-controlled utility Centrais Eletricas Brasileiras SA and e-commerce retailer B2W Cia Digital. They also boosted a position in iron-ore producer Vale SA, which benefits from a weaker Brazilian real.

©2020 Bloomberg L.P.