There's a new faith in Brazil and it has nothing do with the annual Carnaval ritual that peaks next week. Receivables investment funds (FIDCs) are on the lips of every structured banker in Sao Paulo, though the volume of closed deals remains unimpressive. Converting more originators and investors will change that, or at least that's the gamble being made by bankers like Rodrigo Xavier, a partner at local bank Banco Pactual.

Xavier and his team are so confident in growing volumes that Pactual Asset Management plans to set up a mutual fund of FIDCs - in effect a fund of funds or quasi-CDO - in March. "The FIDC is a powerful instrument," Xavier said, citing the tax advantages and other features that have drawn at least 15 issuers to the vehicle already.

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