Record $57 Billion Outflow Hits Battered Brazil Hedge Funds
- Country’s hedge funds failed to beat benchmark again in 2024
- Wrong-way rate bets hit Vinland, Ibiuna; Verde rebounds
Investors yanked money out Brazilian hedge funds at a record pace in 2024 as rising interest rates and a crumbling of local markets fueled a second year of underperformance for the struggling industry.
The stampede — almost 357 billion reais ($57.3 billion,) more than the past two years combined and the worst-ever in data going back to 2002 — comes as investors flock back to fixed income. Policymakers delivered three rate hikes in 2024 and pledged at least two more increases by March, which will take borrowing costs to 14.25%. That’s made it harder for hedge funds to beat returns of plain-vanilla instruments.