Ted Seides had a podcast with a supposed main actor of Brazilian equities management, Constellation Asset Management.
Broadly speaking, the podcast repeated cliche Warren Buffet-isms but the speaker did say a few things that I found to be interest, albeit slightly obvious in retrospect.
First, Brazil is a relatively large population base in the 200Ms. Second, the population base is young and very tech forward. Third, and perhaps most interesting, Brazil has substantial import/export restrictions.
What the third point results in is local company dominance vs international companies expanding successfully into Brazil. He had one example where there is only one international bank that has penetrated the Brazilian market whereas local incumbents regularly run 20%+ ROEs.
The second point made that I found to be very interesting was that indices don’t do a good job of capturing the best companies in the economy because a select few very large commodity companies dwarf the rest of the pack – so active management or custom indexing is key (with the note that many of the market leaders are private).
I enjoyed these select takeaways amid the muck of run of the mill investment jargon in the interview – as I own full non-core positions in two Brazilian alternative asset managers, and it helps me understand in some small sense how they may drive alpha in this market.