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Brazil Hedge Fund That’s Soared 54% in 2022 Bets on Oil, Stocks

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(Bloomberg) -- Brazilian hedge fund Vista Capital, which has trounced peers in 2022, is sticking to a bet on surging oil prices that drove a 54% return year-to-date while also piling into the nation’s battered stocks.

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“I remain optimistic on oil and it’s still a relevant position in our fund,” Joao Landau, a founding partner at Vista, said at an event in Sao Paulo Wednesday. “Either we’ll have a great shortage of oil and demand won’t be as low as expected, or the world will overcome this crisis and demand will normalize.”

Vista, based in Rio de Janeiro, shot up in the ranks of Brazilian hedge funds last year after correctly predicting wild swings in commodities, particularly the rally in oil prices. Even after a recent slump to $97 a barrel, Brent crude has surged 25% this year. Investors are currently weighing the prospects for a global economic slowdown against a tight market to gauge where assets will go from here. Vista is also betting on falling iron ore prices, Landau said.

Hedge Fund Reaps 66% Gain in Brazil on Oil Rally, Iron Collapse

Landau’s Vista Multiestrategia FIC FIM fund is up 53.5% year-to-date after fees, beating a basket of 204 local hedge funds tracked by Bloomberg. The Anbima Hedge Fund Index rose 8.9% in the same period.

Another key bet for Vista is on the recovery of Brazilian stocks. Although there are some uncertainties ahead of October presidential elections, global investors seem to be “ready to put money to work” in local equity markets, Landau said. And as other emerging-market nations such as China, Russia and India grapple with their own issues, “Brazil is winning by default.”

The nation’s Ibovespa benchmark index is trading at about 6.2 times forward earnings, well below its 10-year average of 11.6 times, battered by higher global rates and a rotation of local investors back into fixed-income products.

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