One of Brazil’s best-known hedge fund managers said it was stung by what it called the nation’s biggest case of corporate fraud on record with Americanas SA and joined banks in slamming the firm’s billionaire shareholders.
(Bloomberg) — One of Brazil’s best-known hedge fund managers said it was stung by what it called the nation’s biggest case of corporate fraud on record with Americanas SA and joined banks in slamming the firm’s billionaire shareholders.
Verde Asset Management, which is run by industry veteran Luis Stuhlberger and whose flagship hedge fund is up over 21,800% after fees since its 1997 inception, says its exposure to local bonds of the Brazilian retailer brought a 14 basis-point loss last month, trimming gains to 2.7% in January.
“We were victims of a fraud,” Verde wrote in an investor note released Monday. Americanas had a vast track record, counted on three key shareholders considered to be “the country’s best business managers” and had its balance sheets audited by one of the sector’s top firms, the fund said.
Americanas saw its shares and bonds collapse following the reveal of 20 billion reais of accounting “inconsistencies” that led it to file for bankruptcy in less than two weeks.
Investors now want to know whether Americanas’ key shareholders — billionaires Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira — will inject money into the distressed firm and appease creditors. The billionaire trio, which owns about a third of the company, “has been silent, but clearly chose the financial option,” the fund said.
Billionaire Sicupira Is Said in Talks With Americanas Creditors
While it’s expecting the bankruptcy protection process to be “lengthy” and “noisy,” Verde urged for a quick solution. “The longer it takes, the smaller the odds of any relevant recovery for the company (and its employees, suppliers, creditors and shareholders).”
–With assistance from Cristiane Lucchesi.
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