The soon to be official recession in Brazil is beginning to claim casualties among firms in several sectors, and the financial sharks are starting to circle the waters. Related to this, according to a March 23rd article published by BloombergBusiness, Brazilian asset management company Peninsula Investimentos is planning to launch a distressed-asset fund next year.
The new Brazil distressed asset fund is backed by Credit Suisse and is anticipated to debut at close to R$500 million, or around $155 million. Peninsula has hired five new staffers for the new fund, based in Brazilian media reports quoting CEO Antonio Quintella. The current plan is to start raising capital for the fund among domestic and foreign investors during the second half of this year.
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More on Peninsula’s new distressed asset fund
Several media sources are reporting that Credit Suisse has recently taken a minority, non-voting stake in Peninsula. Of note, the Swiss IB assisted Quintella, who was formerly head of the Americas for Credit Suisse, in founding Peninsula back in 2012.
The asset management firm currently employs somewhere around 40 people and has close to $775 million in assets under management, currently primarily invested in a liquid-instrument hedge fund.
Weak economy in Brazil leading to bankruptcies
Brazil has been suffering through an economic down turn the last few quarters, and this situation is producing opportunities for distressed investing within a number of sectors. The country recently reported a 34% increase in bankruptcy filings in the 12 months through February 2015.
Most economists are anticipating that Brazil will slip back into recession by the end of 2015, pulled down by the trifecta of a strong U.S. dollar/weak real and very low energy and commodity prices. Knowledgeable sources told Bloomberg that Peninsula will focus mainly on on troubled assets in Brazilian industries such as commercial construction and consumer products, as well as businesses with high amounts of dollar-denominated debt.