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A $4.6 Billion Brazil Fund Bets on Inflation Drop, Petrobras

  • Petrobras stock prices in ‘terrible’ outlook: Kapitalo’s Woelz
  • Fund also has a short position in Brazil inflation breakevens
Carlos Woelz, founding partner at Kapitalo Investimentos
Carlos Woelz, founding partner at Kapitalo InvestimentosPhotographer: Rodrigo Capote/Bloomberg

Kapitalo Investimentos Ltda, one of Brazil’s largest hedge fund managers, is on the lookout for mispriced risk at home ahead of general elections. 

The firm, which manages about 25 billion reais ($4.6 billion), is wagering that inflation rates implied in the bond market will slow and that investors have become too negative on state-controlled oil company Petroleo Brasileiro SA.