Canada Pension to Continue Brazil Expansion

The Canada Pension Plan Investment Board is continuing its expansion into Brazil, even as the country goes through troubled economic times.

The fund is adding two people to its Sao Paulo office, according to Bloomberg, despite the fact the the country’s credit rating was lowered another notch this week.

Bloomberg talked to CPPIB’s Rodolfo Spielmann, head of Latin America:

“This crisis, like others, will pass,” Spielmann said in an interview at Bloomberg’s office in Sao Paulo. “We’re not reassessing our strategy for Brazil, unless a cataclysm happens. We’re still very excited about investment prospects in the country in the medium and long term.”

Born in Argentina, Spielmann worked for Bain & Co. Inc for 21 years, 14 of them in Brazil, before joining CPPIB in 2014.

The Canada Pension Plan Investment Board isn’t calling a bottom for Brazilian assets, and sees a sustained rebound in the currency as a ways off. Still, there’s long-term value in the region’s best companies, Spielmann said, declining to specify which stocks he is buying.

“We are not bottom fishers,” Spielmann said. “Our ambition is to have the best assets on the market, because their price may fall 10 percent, 20 percent or 30 percent, and, still, they will always perform better than the medium-quality assets in the long term.”

The fund returned about 18 percent in the 2015 fiscal year, more than double its 10-year annual average.

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Brazilian stocks are trading near the lowest in six years, while the nation’s currency has dropped every year since 2011 as President Dilma Rousseff struggles to get support for measures to reverse a budget deficit that has caused the country to lose its investment-grade rating.

CPPIB has about $1.8 billion in Brazil-related investments.

Photo by  Horia Varlan via Flickr CC License