U.S. markets closed

Mysterious Equity Fund Leads Brazil Losses With 80% Drop in 2020

Felipe Marques, Cristiane Lucchesi and Vinícius Andrade
1 / 2

Mysterious Equity Fund Leads Brazil Losses With 80% Drop in 2020

(Bloomberg) -- Among the spectacular losses in Brazilian equity funds this week, one in particular stands out: FIA Ponta Sul IE.

The fund had a negative return of 55% on March 9, more than four times the drop in the broad equity index that day and the most among 1,400 Brazilian equity funds, according to data compiled by Bloomberg. Year-to-date through Monday, the fund has plummeted 80%, also the biggest loser among peers, with assets under management shrinking to 1 billion reais ($210 million), from a peak 5.6 billion reais on Jan. 23.

A representative from Ponta Sul didn’t reply to a telephone and email request for comment.

The Ponta Sul fund was launched in 2012, has a single shareholder and is managed by Flavio Calp Gondim, according to regulatory filings. Back in November last year, it had among its holdings retailer Magazine Luiza SA and flip-flop maker Alpargatas SA, the latest regulatory data show.

Ponta Sul Investimentos, the Rio de Janeiro-based firm that manages the fund, was an early investor in Banco Inter SA, a Brazilian digital bank that counts SoftBank Group Corp. among backers, and went public in 2018. Ponta Sul holds a stake of about 15% in the lender, according to the most recent filing available. Banco Inter has shed about a quarter of its market value over the past eight days.

Since its inception through March 9, the FIA Ponta Sul IE fund had a 34% return in local currency compared to a 49% gain for the Ibovespa stock index. The fund’s trustee is Banco BTG Pactual SA, according to the regulator.

Brazilian markets have been particularly hard hit by the global sell-off. The Ibovespa stock index has erased 14 months of gains since late January and is down 29% since its peak in the beginning of the year, as tumbling oil prices and coronavirus-fueled jitters hammer global equities, with Brazilian stocks entering a bear market.

On Wednesday, a 10% drop triggered a circuit breaker for the Ibovespa for the second time in three days.

--With assistance from Sebastian Krieger and Filipe Guerra.

To contact the reporters on this story: Felipe Marques in Sao Paulo at fmarques10@bloomberg.net;Cristiane Lucchesi in Sao Paulo at clucchesi5@bloomberg.net;Vinícius Andrade in São Paulo at vandrade3@bloomberg.net

To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Daniel Cancel, Julia Leite

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.