Siguler Guff raises $300m for fund investing in Brazilian legal claims

Much of the total comes from a $100m allocation from the University of Michigan.

Siguler, Guff & Company has locked down $309.41 million for its latest emerging markets fund, according to a Securities and Exchange Commission filing.

The New York-based firm is raising its Siguler Guff Brazil Special Situations Fund, which will invest in legal claims against Brazil’s government. The University of Michigan makes up much of the total raised so far, with a $100 million commitment the public university made in September 2017.

The backdrop of Brazil’s worst-ever recession – which officially ended last year after the country’s gross domestic product grew by 1 percent in the first quarter of last year – provided a “valuable window” for backing legal claims, the university said in an investment memo.

While many claims stem from regulatory “bad acts” dating back decades, more recent claims have a path to settlement within 10 years because of recent judicial and constitutional changes, the document noted.

A representative for Sigular Guff could not be reached for comment.

Investors in the Emerging Markets Private Equity Association’s limited partner survey ranked Brazil as the sixth most attractive emerging market to invest in of the countries listed. The biggest deterrent for LPs from investing in Brazil is currency risk, with 59 percent saying so. Some 39 percent said political risk was a deterrent.

Latin America-focused private credit vehicles currently in market are seeking $1.99 billion, a notable turn of fortunes after the region had no dedicated capital and only locked down $660 million in 2016, according to PDI data.

Siguler Guff has a history of targeting emerging markets. In March 2014, the firm closed on approximately $650 million for its Siguler Guff BRIC Opportunities Fund III, which was a private equity fund-of-funds investing in vehicle targeting Brazil, Russia, India or China.

Alongside the commingled fund, the firm also raised three separate accounts, one of which was a $300 million vehicle belonging to the New Jersey Division of Investments. The total BRIC and emerging markets platform at Siguler Guff manages $3 billion. Across all its strategies, the firm manages $13 billion.