Hedge Fund SPX Capital Bounces From Slump to Beat Brazil Peers

(Bloomberg) — A year after posting his first ever annual loss, Brazilian hedge fund manager Rogerio Xavier pulled off a comeback. 

The 58-year investor, one of the founders of SPX Capital, saw the SPX Raptor fund — a more aggressive version of its flagship Nimitz offering — top 96% of peers tracked by Bloomberg last year. The fund jumped 22% after fees. That’s double the advance of the industry benchmark rate and almost four times the gains of a basket of local hedge funds.

Currency wagers including bets on a stronger US dollar were the biggest positive contributor to performance in 2024, according to people familiar with the matter. The fund also profited from rate and equity bets, said the people, asking not to be named because the information isn’t public.

The fund’s latest note to investors, which was seen by Bloomberg, says it’s sticking to bets on rising interest-rate futures in Brazil and is bearish local stocks, while positioning for the dollar to climb against a basket of currencies.  

The SPX Global Eagle fund, its offering to offshore clients, rose 14.3% in US dollars last year net of fees, said the people.

It’s a turnaround for Xavier, one of the best-known names in the Brazilian hedge fund industry. The veteran investor apologized to clients in 2023 after wrong-way bets on his home country eroded returns, fueling the fund’s first negative year since its inception in 2010. 

At the time, the London-based fund manager said he saw no issues with SPX’s business model or its strategy of expanding globally, but he acknowledged a “disappointing” performance and said the firm failed to “separate the noise” in the local political landscape.

SPX Capital, which oversees 62 billion reais ($10.2 billion), was created in Rio de Janeiro by Xavier, Daniel Schneider and Bruno Pandolfi. Over the last few years, the firm has been hiring senior portfolio managers in places like Singapore and the US.

The Brazilian hedge-fund data monitored by Bloomberg include only so-called multi-market funds with more than 500 million reais in assets, and excludes those with less than 100 shareholders. It also removes funds with a correlation of above 0.97 with gold, the US dollar and equity benchmarks.

–With assistance from Sebastian Krieger, Marcelo Quinteiro and Felipe Saturnino.

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