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After 67% Return, Hedge Fund Bets Big on Brazil Growth Revival

  • Fund is buying up bank stocks and shares of car rental company
  • Surge in foreign investment risks fueling a ‘bubble’: Bartunek

One of Brazil’s best performing hedge funds is looking to capitalize on a fledgling economic recovery after reaping lucrative gains by betting on companies that were largely recession-proof.

Constellation Investimentos e Participacoes Ltda., based in Sao Paulo, is now snapping up bank stocks as well as shares of car rental company Localiza Rent a Car SA, which could see a recovery in profit after cutting costs during the downturn and gaining market share from rivals, said chief investment officer and founding partner Florian Bartunek. The Constellation Fund SPC - Equities Class II fund, which invests only in Brazilian equities, has returned 67 percent in 2016, outperforming 98 percent of 302 long-biased peers.