Financial Risk Management, the hedge fund company, has signed a strategic partnership with Itajubá International, a Brazilian alternative investment firm, tapping a market for clients including family offices and private banks.

The move is designed to give institutional investors in Brazil access to global “best of breed” hedge funds, FRM said. As part of this relationship, FRM and Itajubá Investimentos, a Brazilian distributor owned by partners of Itajubá International, have recently launched what they say is the only Brazilian mutual fund which invests the majority of its assets in a global portfolio of offshore hedge funds.

The agreement is another indicator of how Brazil, both as a centre of wealthy individuals and as an economic force, is increasingly making its presence felt on the financial scene.

FRM Global Hedge Fund FIM, when registered with the CVM (Brazilian Securities and Exchange Commission), will be available to “super qualified” Brazilian investors, such as private banks, pension funds and family offices. It will invest the majority of its assets in an offshore fund managed by FRM which contains over 30 international commodity trading advisors (CTAs) and hedge funds.

The fund’s objective is to produce positive return streams which are uncorrelated to Brazilian and international markets, providing institutional investors with a new option for diversifying their portfolios and increasing risk-adjusted returns. In addition, the fund will be fully hedged in reais, allowing investors to benefit from the interest rate differential between reais and dollars, FRM said.

Marco Zanuso, director at FRM responsible for Latin America said: “Itajubá and FRM share the same philosophy, that alternative investments can bring significant value to institutional portfolios because of their diversification benefits.

Recent changes in Brazilian regulations now allow for up to 10 per cent of pension assets to be invested overseas.