Historical series Itaú Asset and Algarve Capital create partnership for investments focused on alternative assets
Thesis allocation will be based on resources from lawsuits from public and private entities.
July 2022 – Itaú Asset, the largest private asset management company in Latin America, and Algarve Capital, a financial company specialized in alternative asset allocation (“legal claims”), announce the beginning of a long-term partnership whose main objective is the creation of investment funds, co-managed by both companies. This partnership will focus on resources from judicial and arbitration cases, acting as a potential dispute resolution and providing liquidity to the parties involved.
The products that will be jointly structured will rely on Algarve’s expertise and capacity for execution and origination in this model of alternative assets, while adding Itaú Asset’s risk control, search for portfolio diversification, and sector and credit analysis, when applicable. The funds object of the partnership bring a risk uncorrelated to the usual risks of the financial market, with a maturity term aligned to sophisticated products of the investment industry and with a substantially higher return.
Algarve Capital’s investment thesis in the alternative assets segment is based on the purchase of credits from lawsuits and arbitrations involving public entities and financially sound private companies. These are often cases and disputes that have already been judged or orders that have already been issued or will be issued in the short term.
The fund should be available in the second half of 2022 and will initially be offered to Itaú Unibanco clients, Family Offices, and foreign investors. In addition, the partnership has also established that Itaú Asset will have the option to acquire a minority share of Algarve in the future.
“Itaú Asset always seeks to offer a diversified portfolio of investments, whether alone or through partnerships, according to the interest and needs of our clients. Thus, Algarve fits perfectly in this new front of our operations as a highly specialized player with a solid track record. They share with us the use of creativity to find solutions, while being cautious and thinking in the long term, always respecting the resources invested by the clients. They act ethically and have a differentiated team whose culture is very similar to Itaú Asset’s DNA,” says Sergio Goldstein, head of Itaú Asset’s structured credit area.
“The partnership with Itaú Asset has the potential to boost our operating capacity and will allow us to be positioned as one of the market leaders and consolidation vectors for the coming years,” says Daniel Cardoso, director of Algarve Capital. “We have a significant pipeline of opportunities in legal claims with solid thesis and interesting return potential. We act both as a liquidity agent in this market and as a settlement agent. Through the structures and guarantees, we aim to protect the invested capital and receive the expected return even in case of unforeseen events,” adds David Norgren, director of Algarve Capital.
The potential of the legal claims segment in Brazil is vast. According to data from the document ‘Justice in Numbers 2021’ from the National Council of Justice (CNJ), the Judiciary ended in 2020 with 75.4 million cases in progress. From January to December of that year, 27.9 million cases were finalized, while 25.8 million were initiated.