From Bloomberg, February 22:
The Moreira Salles name is known throughout Brazil. But few anywhere in the world are familiar with the family office that manages its vast fortune.
Spend any time in Brazil and you’ll probably hear about — and hand money over to — the Moreira Salles family.
It co-owns the nation’s largest bank, controls 80% of the world’s supply of a critical rare-earth metal used in everything from cars to pacemakers, and holds stakes in a host of companies, including the maker of the ubiquitous Havaianas flip flops. The family name is emblazoned across museums, entrenched in culture and rooted deeply in finance. All told, the family is worth over $20 billion, according to the Bloomberg Billionaires Index.
But there’s one prized endeavor it has assiduously kept out of the public eye: The money-multiplying machine that handles the family fortune.
Few outside the country’s banking circles have ever heard of Brasil Warrant Gestao de Investimentos, or BWGI. Yet the family office, which began in its current form in 2008, now manages over $6 billion and employs about 50 people in Sao Paulo and New York trading stocks, bonds, private equity, commodities and currencies around the world, a review of regulatory filings shows. One of its main funds — required by Brazilian law to make public disclosures — provides a glimpse of just how successful it has been.
The $860 million Mantiqueira hedge fund just had its best month ever in December and has returned more than 170% over the past five years, beating almost all its peers, data compiled by Bloomberg show. That’s equal to a compound rate of roughly 22% a year.
“I joke that our single client doesn’t withdraw his money when we’re doing poorly — he withdraws the managers themselves and hires new ones,” Demosthenes Madureira de Pinho Neto, a former high-ranking central bank official who leads BWGI, said last year in a rare public appearance hosted by impact-investing firm VRB. “So, the pressure is there for better performance.”
Pinho Neto, who was poached from the family’s lending giant, Itau Unibanco Holding, declined to talk about BWGI, as did the powerful clan’s four brothers — Fernando, Pedro, Joao and Walter. Current and former employees contacted by Bloomberg News also declined to discuss the family office.
Family offices have been around for centuries, managing investments, tax affairs, as well as personal lives for the wealthy. But they’ve exploded in number in recent decades as powerful industrial, retail and real estate families like Italy’s Ferrero clan, Hong Kong’s Li Ka-Shing and the Wertheimers of the Chanel empire have built sophisticated operations to discreetly invest their burgeoning personal fortunes.
In Brazil, where inequality runs deep and many of the country’s biggest companies are family owned, none are bigger than BWGI. In the past, rich Brazilians could easily park their money in government bonds and earn a decent low-risk return because interest rates were sky high. But more recently, the central bank has pushed down rates to record lows, forcing wealthy families to get more creative....
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