Hedge Funds

Brazilian firm targets special situations


Emerging markets may be chafing under what has become a global subprime credit crisis, but Rio de Janeiro-based Polo Capital Management is preparing to launch a new fund.

Polo, which opened in December 2002 and currently manages $800 million, will begin trading a special situations fund in the fourth quarter. The strategy is something of an anomaly for Brazil, where an estimated 200-plus domestic funds manage roughly $24 billion in mostly multistrategy approaches.

Hedge funds are a recent phenomenon in Brazil because, until a few years ago, rampant inflation and runaway interest rates allowed investors to earn high