Banco do Brasil SA’s pension fund, Latin America’s largest, will invest in U.S. and European stocks through funds of money managers including BlackRock Inc. (BLK) and JPMorgan Chase & Co. (JPM) as it seeks to diversify holdings.
Previ, as the Rio de Janeiro-based pension fund is known, is setting up its first vehicle to invest in large foreign firms, Chief Investment Officer Rene Sanda said today, adding that it will also invest through funds run by Schroders Plc and Franklin Templeton Investments. The fund, in which Previ will have a 25 percent stake will be managed by BB Gestao de Recursos DTVM SA, the asset manager that is also a Banco do Brasil unit, he said. Other Brazilian pension funds will participate in the fund.
“BB DTVM will invest in funds already constituted by these four managers, it’s a feeder,” Sanda told reporters today in Rio. The objective is “portfolio diversification, not returns.”
Previ, which manages 164 billion reais ($75.4 billion) for Banco do Brasil employees, has approved global investments of as much as 340 million reais this year in foreign stocks that may include Google Inc. (GOOG), said Antonio Luiz Benevides, executive manager of the fund. The pension fund may also invest in fixed-income and private equity abroad in the future as it accelerates real-estate investments in Brazil, he said last month.
The fund for international stocks is expected to be set up by mid-November, Sanda said today, declining to give an estimate of its size until completion.
Brazil’s pension funds reported an average loss of 0.7 percent in the first half, according to to the Brazilian pension fund association, known as Abrapp. Brazil’s benchmark Ibovespa index fell 22 percent during that period while Google, based in Mountain View, California, rallied 25 percent.
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