With Brazil’s economic and political crises roiling the nation’s financial markets in recent years, investors have searched far and wide in hopes of hitting upon a money-making venture immune to the turmoil.
Claritas Investimentos, a Sao Paulo-based money manager, has found just the thing: eucalyptus trees. It began snapping up forestry land in Brazil and selling the pulp produced by the trees during an earlier period of upheaval — the tumult that rocked global markets in 2008. And the bet has paid off handsomely. Its two tree funds with 635 million reais ($177.8 million) in combined assets have delivered average annual returns of 17.5 per cent since 2008, according to Claritas, as pulp prices soared 42 per cent from the lowest level in over a decade in 2009. Brazil’s stock market, meanwhile, has saddled investors with average losses of 4.7 per cent.
Claritas is now seeking to start a third such fund to withstand Brazil’s longest recession in more than a century. The company, which has 3.5 billion reais of assets under management and counts local pension funds among its clients, grows eucalyptus trees in the Brazilian states of Mato Grosso do Sul, Minas Gerais, Bahia and Tocantins, where it owns a 130,000- hectare (320,000-acre) farm.