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Pimco expands Brazil feeder fund range with double launch

Pimco expands Brazil feeder fund range with double launch

Pimco has expanded its range of feeder funds for the Brazilian market after launching two new products in the past month.

The US bond giant now offers Brazilian investors access to the Pimco GIS Mortgage Opportunities fund and its flagship hedge fund Pimco Absolute Return Strategy. 

Both were launched in April, with the mortgage strategy's feeder fund renamed the Pimco Flexible Bond for the Brazil market.

They follow the launch of feeder fund versions of Pimco Income in February 2016 and Pimco GIS Capital Securities fund in December 2017. The latter's feeder is named the Pimco Global Financial Credit in Brazil.

Feeder funds offer local investors access to a product that is not usually available in their market by creating a tax efficient version domiciled in their country.

São Paulo-based Luis Oliveira, Pimco’s senior vice president of business development in Brazil, confirmed the launches and said the group has attracted 7.7 billion reales ($2.16 billion) in assets to its feeder funds so far.

By far the most popular has been the Pimco Income, run by Citywire AA-rated duo Dan Ivascyn and Alfred Murata, with 7.6 billion reales ($2.1 billion). The Pimco Absolute Return Strategy, despite only being launched in April, is already the second most popular option with 118 million reales ($52.8 million) invested.

‘Before launching any strategy, we discuss our clients’ needs,’ said Oliveira. ‘All these feeder funds were designed to meet client demands in terms of risk/return expectations, liquidity needs and correlation.'

He added that for the time being they are not planning on making any more of their funds available on the local Brazilian market.

‘We are comfortable with our local platform and we are focused in growing it. Naturally, we constantly discuss new ideas with our clients and we are flexible and nimble to implement it when there is an opportunity.’

Pimco has 10-person team working in its São Paulo office, including credit research and business development specialists for Latin America.

Feeding frenzy

The number of feeder fund launches in Latin America have gained pace since the start of the year, with both JP Morgan and Baron Funds launching products for the Andean region and Brazil respectively.

In March, Aberdeen Standard also joined in the trend by sealing a partnership with local Brazilian player XP Investimentos and launching a feeder fund version of its Aberdeen Global Multi-Asset Growth fund.

Last year, Legg Mason also expanded its feeder fund range in Brazil by adding infrastructure and global credit funds.

 

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