São Paulo firm raises Brazil’s largest NPL fund

 The fund, distributed by Credit Suisse Hedging-Griffo, is targeting returns of up to 35 percent.    

Brazilian distressed asset manager Jive Investments Holdings has closed the largest distressed debt fund in Brazil with BRL500 million ($144 million, €132 million) in committed capital.

The fund received investments from a mixture of Credit Suisse’s private banking clients and international institutional investors. Credit Suisse Hedging-Griffo, the Swiss lender’s Latin American asset management arm, distributed the fund.

The vehicle is looking at target returns of about 35 percent, PDI has learned. The six-year fund will invest in distressed assets, especially non-performing loans.

The São-Paulo based firm has a pipeline of investments in place and about 35 percent of the vehicle’s committed capital has already been deployed.

“It is a mix of portfolios that were acquired by Jive last year. This includes the portfolio from Lehman brothers and some from mid-sized banks from Brazil-mostly portfolios of non-performing loans and a portion to fund expenses and investments that will be announced in the next few weeks,” a source close to the situation said.

Jive has been investing in Brazilian distressed debt for a number of years. It bought another $350 million worth of their bad loans consisting of corporate NPLs and distressed assets originated by Lehman Brother’s fixed income desk back in 2010, according a report by Bloomberg.

Institutional investors as well as high net worth individuals in New York committed about 10 percent of the total amount raised. The rest of the commitments, around 150 by number, came from Credit Suisse Hedging-Griffo’s private banking clients, according to the source.

The fund, which has a very similar structure to private equity in terms of committed capital, capital close and fees, will invest the sum over next two-and-half years, the source continued. Jive Investments fund was launched in April this year.

The vehicle is a restricted effort offering , which is akin to a private placement where the fund cannot have more than 50 Brazilian investors and over all 75 investors investing in the vehicle, according to Brazilian financial regulations. However, the Jive vehicle was not restricted by these rules because the 150 investors that allocated to the vehicle via Credit Suisse were treated as a single Brazilian investor, the source noted.

Jive is the largest buyer of distressed assets in Brazil and manages a portfolio of BRL2.9 billion in non-performing credits, including corporate and retail loans in Latin America.