Reagan Silber

CommonWealth Opportunity Capital & Brazilian Interest Rates

In a recent posting from CommonWealth Opportunity Capital, where Reagan Silber is the President, Adam Fisher commented on research about Brazil interest rates.

As he began, “From a strategic perspective we believe global macro fund managers should have sizeable allocation to carry and roll down strategies in high growth/ high yield economies. Brazil in particular exhibits a lot of the characteristics and fundamentals that we look for to implement this strategy. So, we largely agree with the fundamental analysis submitted by the Brazilian fund manager.”

While making this statement, he went on to explain differences in implementation that CommonWealth has with the Brazilian fund managers. He explained that their alternative strategy includes “long a one year (zero coupon) Brazilian bond with an effective yield of 10.59% (1% transaction cost) maturity 7/1/11” and “buy 5 year CDS protection on Brazil” among other ideas.”