Managers outside the RJ-SP axis indicate actions that are not on the market’s radar

Far from what is conventionally known as the great financial centers of the local market, in the regions of Faria Lima, in São Paulo, or Leblon, in Rio de Janeiro, equity fund managers located in other regions of the country argue that, due to the physical distance, they are able to have a more independent view, with less influence from the average perception of peers, to build portfolios with positions that are outside consensus.

It is true that managers outside the Rio-SP axis do not fail to bet on more obvious names, commonly present in the portfolios of local industry funds, so as not to waste outstanding performances in sectors at a good juncture, such as exporters of commodities and the big banks.

But it is through stocks that do not appear so often in the portfolios of most funds that managers far from large centers have been able to deliver differentiated returns to investors over the last few years.

Inspired by Warren Buffett guides a manager in the countryside of Paraná

Real Investor, a manager based in Londrina with around R$3 billion in assets, is one of the leading companies in the Brazilian market that is not headquartered in a capital city.

Partner and co-manager of Real Investor, Anderson Lueders says he doesn’t see geographic distance as an obstacle. On the contrary.

He recalls that American investor Warren Buffett, one of the main inspirations for the philosophy of “value investing” pursued by Real Investor (to buy solid stocks at discounted prices), lives in Omaha, a small town in Nebraska with around 500,000 inhabitants, and it didn’t need to be in New York to become one of the biggest references in the market on a global scale.

To obtain an additional return in relation to the market average, it is necessary to identify advantages in a certain business that most investors have not yet noticed, says the Real Investor manager. And, by not being present in large centers on a daily basis, the influence in relation to the average perception of peers ends up being smaller, he says.

“Because we don’t live so intimately with this circle, we’re not influenced as strongly.”

Lueders points out the auto parts manufacturers Tupy and Mahle Metal Leve among the positions he carries in the funds and that do not usually appear as much among the main bets of the market.

“These are two companies in the automotive sector that benefit a lot from the current scenario of logistical restrictions and that, at the same time, have a good part of their revenues in dollars”, says the manager.

He also mentions the construction company Even among the stocks in the portfolio, in a sector that, due to the negative impact of the high interest rates on real estate financing, has been little remembered by peers at this moment, but which Lueders believes has a discount beyond reasonable, given the operational robustness of the business.

From the beginning of the strategy, in March 2012, until July 2022, the manager’s main fund, the Real Investor FIA BDR Level I, has accumulated a positive return of 302.5%, against gains of 56.8% on the Ibovespa. In the year, the fund is close to stability, with a slight increase of 0.1%, against the 1.6% drop in the market index.

Away from the herd, but delivering consistent results, says manager of Rio Grande do Sul Quantitas

Managing partner responsible for the management of variable income at Quantitas, from Porto Alegre, with approximately R$ 4.7 billion in assets, Wagner Salaverry also sees the geographic distance from the main financial centers as a factor that contributes to the construction of a uncorrelated portfolio from the market average.

“We study in different schools, live with different people on a daily basis, and, without a doubt, it is something that helps us to think a little differently too”, says Salaverry.

He points out the drug manufacturer Hypera, the footwear manufacturer Grendene and the logistics solutions company Hidrovias do Brasil among the bets that are far from consensus.

These are stocks that combine characteristics such as a low level of indebtedness and strong cash generation to go through a period of higher Selic, with prices on the stock exchange considered very flat compared to the results recently reported in the quarterly balance sheets, says Salaverry.

“The fact that we are geographically distant helps to keep us away from the herd”, says the manager, adding that it is important to have positions that diverge from the average, but, at the same time, deliver consistent returns to investors. “It’s no use staying away from the herd if you can’t get money for the customer.”

Since its inception, in February 2011, Quantitas’ FIA Montecristo fund has accumulated a positive return of 151.3%, against a 54.2% rise in the Ibovespa. In the year, the fund retreated 1.8%.

Proximity to investors contributes to under-the-radar bets, says manager of mining company AF Invest

Leandro Saliba, partner and manager at AF Invest, a manager in Belo Horizonte with around R$ 3.5 billion in assets, says that the fact of keeping a close relationship with the house’s clients, many of them residing in the region and with long-standing with the company, contributes to a portfolio that diverges from the market average.

This proximity to the shareholder base, says Saliba, allows managers to select names that are not necessarily present in most funds, and that eventually are not, in fact, even at their best operational moment, but that present perspectives very positive ahead and they trade with shares on the stock exchange at levels considered excessively discounted.

“We are very close to our clients and, because of that, we have carte blanche to make the investments that we believe are the most appropriate at the moment”, says the manager.

Banco ABC Brasil and BR Partners, businesses that Saliba believes tend to benefit from a process that he understands to be just beginning, of capital market development, as well as Grupo Pão de Açúcar and the electric company Neoenergia, are among the positions that the manager carries in the portfolio of the FIA ​​(equity investment fund) Minas.

“Instead of buying the best companies, best managed in the sector, we prefer companies that have a very large discount and that, when corrected, will have a strong appreciation of the shares”, says Saliba.

The fund of the Belo Horizonte manager has risen 230.15% since its inception, in February 2010, against the 55% appreciation of the Ibovespa, with a drop of 2.8% in 2022.

Learn more about funds from managers outside the RJ-SP axis

Background: Real Investor FIC FIA BDR Level I
Minimum initial application: BRL 5,000.00
Administration fee: 2% pa
Performance fee: 15% on what exceeds the Ibovespa

Background: Quantitas Montecristo Equity Investment Fund
Minimum initial application: BRL 1,000.00
Administration fee: 2% pa
Performance fee: 20% on what exceeds the Ibovespa

Background: AF Invest Minas FIA
Minimum initial application: BRL 1,000.00
Administration fee: 2% pa
Performance fee: 15% on what exceeds the Ibovespa