Brazilian investment management firm Apex Capital has partnered with New York-based Baron Funds to give local clients access to a basket of handpicked US companies through a feeder fund.
Apex, a Brazilian equity focused-manager which caters to institutional clients abroad and locally, is taking over the distribution contract of the locally domiciled feeder fund of the Baron USA Partners strategy from local group Maraú Investments.
Feeder funds offer local investors access to a product that is not usually available in their market by creating a version of the fund domiciled in their country.
The Baron fund in question is a Cayman Islands structure and mirrors the $2 billion US 40-Act Baron Partners Fund, an all-cap growth fund that invests mainly in US companies that has been run by Ron Baron since 1992.
Diney Vargas, managing director and chief operations officer of Apex, said Maraú had helped launch the feeder back in February 2015 and accumulated $1 million in client assets.
‘The idea is to more actively bring this product to local investors so that Brazilians can invest in a fund that invests in mostly American companies,’ said Vargas.
The firm offers a number of its own funds and separately managed accounts but this will be its first foray into offering a feeder fund from a third party manager.
‘It’s something we want to start offering and see how it goes,’ added Vargas. ‘For the past few months we have seen locals demand alternative investment, especially offshore. Since we focus on Brazil and Latin America we thought it was best to have an agreement with an established manager like Baron.’
The fund will also give Brazilian investors the opportunity to invest in major champions like Tesla, Hyatt Hotels, CoStar, Charles Schwab and FactSet.
Aside from appreciating Baron's fundamental, bottom-up way of investing, Apex had a professional connection at the firm which helped secure the deal.
Apex, which has $1.7 billion in assets under management, said it has no immediate plans to launch any other feeder funds but if they did, it would likely be Baron’s emerging market strategy for access to developing markets outside Latin America.
Baron declined to comment on the partnership.