A GRANDE CRISE SEM FIM DOS MULTIMERCADOS | Market Makers #384

Summary

The episode discusses the crisis in Brazilian multimercado (hedge fund) funds after years of poor performance, high interest rates, and competition from tax-exempt products. Guest Rafael Medeiros, CIO of Oikos Wealth Management, compares the Brazilian industry to the US experience, explains how his firm selects managers, and shares allocation views on aggressive multimercado funds, passive ETFs for US stocks and bonds, and the structural role of multimercados in long-term portfolios.

• Brazilian multimercado funds face a tough cycle, but the industry is not dead; consolidation and maturation are underway, similar to the US post-2016.
• Medeiros advocates structural allocation to multimercado funds without market timing, as long-term returns can still beat CDI and IPCA.
• Within multimercados, he prefers aggressive funds (volatility >4%) because conservative ones are simply fixed-income wrappers with high fees.
• For US equity and fixed income exposure, his firm uses passive ETFs because active manager dispersion is too narrow to justify fees.
• Key selection criteria for fund managers include team depth, institutionalized process, skin in the game, and ability to withstand drawdowns.
• The 2-and-20 fee model is acceptable only for top-quartile managers who consistently generate differentiated alpha.
• Daily NAV and short redemption periods are harmful; longer lock-ups would better align with the long-term nature of these strategies.