Launch of the LarrainVial Asset Management SICAV – Gavekal Latam Local Currency Debt Fund

Dear client,

On August 1st, LarrainVial Asset Management and Gavekal Capital Limited launched together the “LarrainVial Asset Management SICAV - Gavekal Latam Local Currency Debt Fund”.

What makes the product unique

The fund is a long only fund dedicated to investing in the debt instruments, and currencies of Latin American corporates and sovereigns. The fund is the only dedicated UCITS fund investing directly in the local currency corporate debt of Latin American issuers.

Objective

Both LarrainVial and Gavekal believe that a new bull market has started in Latin American Corporate Debt. Over the past 18 months, and in spite of a pronounced Fed and ECB tightening cycle, Latin American sovereign debt has handsomely outperformed US and EU sovereign debt. Of course, success has many fathers; so behind this unfolding Latin American debt bull market one finds high real rates, sound monetary policies, controlled budget deficits, positive demographics, pension fund reforms that encourage domestic saving. But the exciting part of this unfolding bull market is the extent to which most foreign investors have yet to participate. Should foreign investors start to deploy capital in earnest in Latin American debt markets, then it seems probable that both sovereign and corporate spreads could contract in a meaningful way.

Fund management

Louis-Vincent Gave will sit on the investment committee and review macro risks with Alexandre Larraín and Gonzalo Tocornal, portfolio managers of the fund.

Regards,

LarrainVial Asset Management