Foreign investors in Latin America have found a riskier, more lucrative pouch for their funds. Shares in Brazilian receivable investment fund (FIDC) Canguru have gone to at least two hedge funds, signaling that these risk seekers are now upping the ante in their relentless hunt for meaty yield and are branching out from the safer realm of FIDCs backed by payroll-deductible loans.
Led by Rio-based boutique Hampton Solfise, Canguru is a rarity in Brazil's securitization marketplace, a deal rated below the A' category. Standard & Poor's rated the transaction brBBBf' on the national scale. Traditional foreign investors are scared off even by FIDCs in the national scale triple-A category, with the rough equivalent on the global scale typically coming under investment grade, and the yield being paid out in local currency. As a national scale triple-B, Canguru magnifies these risks. Mellon Servicios Financeiros is the fund administrator and Banco Itau is the custodian.