SAO PAULO, Feb 15 (Reuters) - Verde Asset Management, Brazil’s largest hedge fund, is reluctant to make a large bet against domestic equities in the face of a large inflow of foreign investment, chief investment officer Luiz Stuhlberger told Valor Economico.
In an interview published on Monday, Stuhlberger said he disagreed with the sentiment of non-resident investors who consider Brazilian assets to be good value. They have yet to factor in a much bigger budget shortfall and some potential state company bail-outs that could cause Brazilian asset prices to fall further, he told the paper.
“I think the foreigners are wrong, but I can’t put that investment thesis against such a big inflow,” he said.
Stuhlberger said he did not believe President Dilma Rousseff will be impeached but will instead complete her term without passing necessary reforms. Stuhlberger said Brazil’s economy, already facing its worst recession in decades, will probably have to get even worse for voters to elect an opposition candidate in 2018.
São Paulo-based Verde oversees about 21.8 billion reais ($5.45 billion) in third-party and proprietary capital. ($1 = 4 Brazilian reais) (Reporting by Caroline Stauffer; Editing by Greg Mahlich)