The credit rights investment funds market, known by the acronym Fidcs, is experiencing a more challenging moment given the country’s macroeconomic situation, assesses Ricardo Binelli, managing partner of Solis Investimentos, a reference in the segment, with over 13 billion reais of assets under management.
“It’s a scenario that requires a lot more closeness (in day-to-day monitoring) and attention,” the executive told Reuters, adding that Solis, who works in both management and origination at FIDCS, has taken a much more defensive stance in selecting of funds.
The sharp and rapid increase in the Selic rate since March 2021 – from 2% to 13.75% – and the maintenance of this level since September 2022, together with a stunning economy, have put pressure on the ability of individuals and companies to pay debts, triggering an alert on these assets.
FIDCs are debts, such as bills of exchange, payroll loans, credit cards, among others, converted into securities, transferred to an investment fund, through securitization. And the main risk is the default.
According to Binelli, Solis has not yet observed any more serious cases involving FIDC in its portfolios, such as the need to recompose a subordinated share, highlighting the work in asset monitoring and the higher bar in the selection to compose portfolios.
He also doesn’t show much concern about the forecast that the Selic rate is expected to fall in 2023 and beyond, as pointed out in the latest Focus polls.
“If the interest rate goes down, will there be migration to risky assets? Maybe yes… But we won’t go back to 2%,” he said, referring to the low Selic reached in August 2020 and maintained until March 2021, in the midst of the pandemic of Covid-19, which he considered a point off the curve.
“Even if the (Selic) rate goes to 7% or 8%…we will still be able to deliver 12% or 13%. It will continue to be attractive (profitability) in the fixed income world,” he added, without expressing himself however, a lower flow of fundraising.
After doubling the volume of assets under management in 2022, to 12 billion reais, Solis aims to close 2023 with 15 billion. But the manager believes that some of this movement should reflect interest rate-enhanced “vegetative growth” given the prospect of a slowdown in funding.
In the Fidcs origination, after a weaker start to the year, Solis estimates that May and June should show an improvement in the volume of transactions, with an emphasis on payroll loans.
“In the two months of May and June we will have many things of our own. And the market has also brought things that we were already investors, that we know and like… they are launching new series. So we hope in the first half to optimize (reduce) our box position,” he added.
Binelli also highlighted the recent change of rules in Brazil which made access to the Fidcs for individuals more flexible – until now reserved for qualified and professional investors -, defining it as a “watershed” which opens up various possibilities for market development. The new rules are expected to take effect in October.
Source: Terra
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