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Brazil’s Biggest Hedge Fund Managers See Lower Odds of U-Turn After Vote

  • Congress seen clipping Lula’s wings if leftist leader wins
  • Adam Capital says Brazil now a top destination for investments
Supporters of Jair Bolsonaro, Brazil's president, during an Independence Day military parade in Brasilia, Brazil, on Wednesday, Sept. 7, 2022. Around 10,000 police officers have been deployed to prevent riots in Brasilia, where Bolsonaro supporters will hold pro-government rallies following an Independence Day military parade.
Supporters of Jair Bolsonaro, Brazil's president, during an Independence Day military parade in Brasilia, Brazil, on Wednesday, Sept. 7, 2022. Around 10,000 police officers have been deployed to prevent riots in Brasilia, where Bolsonaro supporters will hold pro-government rallies following an Independence Day military parade.Photographer: Arthur Menescal/Bloomberg

The first round of Brazilian elections made some of the nation’s largest hedge fund managers more optimistic, betting the odds of a major turnabout in Latin America’s largest economy have dwindled. 

The Oct. 2 vote showed a narrower-than-expected gap between front-runner Luiz Inacio Lula da Silva and incumbent Jair Bolsonaro. On top of that, Congressional elections underscored the strength of right-wing parties, signaling that Lula would likely have a hard time trying to implement more radical measures if elected. A runoff vote between the leftist leader and Bolsonaro is slated for Oct. 30.