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(Bloomberg) — Bruno Magalhaes, a former portfolio manager at Autonomy Capital Research LLP, is shutting down the hedge fund he helped launch in Brazil two years ago after industry-wide acquisitions and double-digit interest rates hampered the company’s expansion plans.
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Sterna Capital plans to return cash to its clients after a yet-to-be-held Annual General Meeting, according to a note to investors seen by Bloomberg. A representative of the company showed the authenticity of the note.
“The market has fallen on quite difficult times since our inception, and threat aversion has proven to be a primary challenge in our capital raising process,” the Sao Paulo-based fund wrote in the note. “This has not allowed us to grow at the speed necessary for a sustainable model. “
The fund had more than 60 million reais in assets, according to the latest insights from the Brazilian Capital Market Association. It’s closing with AUM at its peak, Sterna said in the note.
Magalhaes will join Brazilian hedge fund giant SPX Capital as a portfolio manager for macro funds, according to other people familiar with the matter. It is expected to start operations in early 2024 and will be guilty of a new multi-asset. Strategy book, onshore and offshore bets, said one of the other people, who asked not to be identified, discussions about personnel moves.
Magalhaes and SPX declined to comment.
Some hedge fund managers, such as Upon Global Capital and Grimper Capital, have been forced to close their doors as they struggle with large capital outflows. With the benchmark interest rate set at 12. 25%, Brazilians continue to pour their money into high-yield government bonds and tax-exempt products.
–With Donal Griffin’s.
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