Constellation is an equity asset management company founded in 1999 to invest in Brazilian companies using a fundamental approach with an in-depth investment process. Constellation’s strategies are long short and long only, with a mid- to long-term horizon. Both strategies offer vehicles to both local and foreign investors.
With expansion plans charted beyond core market horizons in the Middle East and Malaysia, Islamic finance is setting its sights on finding a safe haven to dock in southern waters. Banco do Brasil, Latin America’s biggest bank by assets, is ready to welcome these explorers with the launch of Brazil’s first Shariah compliant equity fund. Alexandre Ferreira Lopes guides us through these new waters.
The World Cup was fantastic and surpassed all expectations. It is a shame that England could not also have surpassed expectations. Amidst all the coverage of the event, there was one interesting article in the press, which did not cover the usual ground of match reports, injury updates and post-mortems of England’s or Brazil’s performance – it was an article on how hedge funds are investing in the football sector and will continue to do so. The interest generated by the World Cup is only likely to whet the appetite of such investors even further.
Gávea Investimentos was founded in 2003 by Arminio Fraga Neto, former Governor of the Central Bank of Brazil and former Managing Director at the Soros Fund and Luiz Henrique Fraga, former President of Latinvest Asset Management. The firm started with the launch of a Global Macro hedge fund with a focus on Emerging Markets. As the business successfully evolved, clients expressed the desire for investing in private equity in Brazil using our expertise. We then established in 2006 our Private Equity line of business which, as of May 2014, has completed 45 investments and 23 successful exits. Over the last three years, we have added two new lines of business that have been consistently expanding: Public Equities and Real Estate
Brazil already boasts a good level of trade flow with Islamic countries. Trade flow growth over the last 10 years has been above 400%. A good example of this is the export of Halal certified chicken. According to the Brazilian Aviculture Union (Ubabef), Brazil exported 1.48 billion tons of chicken to Middle Eastern countries in 2013. The good results are the consequence of a partnership in which the Brazilian market respects and complies with the requirements of the Islamic market.
Brazil is a predominantly Catholic country, but has carved a niche for itself in the Halal market. One of the largest suppliers of Halal goods to the GCC and the most promising opportunity for Islamic finance in Latin America, Rebecca Simmonds investigates Brazil’s promising future.
The sixth-largest global economy, Brazil represents a very real opportunity for Islamic finance to spread its wings in a hitherto relatively untapped region, while Shariah compliant finance offers Brazil an exciting source of funding to boost development. Alexandre Lopes discusses the opportunities and challenges involved.
On February 6, 2013, the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM) issued CVM Instruction No. 531 (CVM Instr. 531/2013), amending: (i) CVM Instruction No. 356, of December 17, 2001 (CVM Instr. 356/2001), which regulates the incorporation and operation in Brazil of credit rights investment funds (fundos de investimento em direitos creditórios – FIDCs) and investment funds which invest in units of such credit rights investment funds (fundos de investimento em cotas de fundos de investimento em direitos creditórios – FICFIDCs); and (ii) CVM Instruction No. 400, of December 29, 2003 (CVM Instr. 400/2003), which deals with securities’ distribution public offerings.
With mounting competition on the ground, Brazil-based fund managers are increasingly looking to attract international investors, giving rise to the rapid growth of the offshore Latin American asset base.
Constellation Asset Management manages the Constellation Fund, an equity long/short fund that invests primarily in Latin America. The fund trades the following strategies: relative value, pair trading, merger arbitrage, capital structure arbitrage and convertible bond arbitrage. The fund does not invest heavily in the fixed income markets. The founding partners and co-portfolio managers, Florian Bartunek and Eduardo Munemori, are based in Sao Paulo, Brazil.