Historical series Itaú Asset structures second fund to invest in judicial assets
Itaú Algarve Legal Claims II will have a portfolio of 15 to 20 assets.
Itaú Asset is launching its second fund specializing in Legal Claims, a segment of alternative investment products focused on credits linked to public and private lawsuits. Itaú Algarve Legal Claims II is aimed at professional investors and has similar characteristics to the first fund in this family, which was launched in 2022, so that the amounts allocated to these investors opportunities target performance within the IPCA+15% to IPCA+20% range, net.
The new fund will have a portfolio of between 15 and 20 assets, made up mainly of credit rights assignments at a discount and debt instruments backed by credit rights. Many of the assets are already in the due diligence phase.
The term is seven years, with the possibility of an extension for a further three, at the manager’s discretion, for the divestment process. The management fee is 2.0%, and the performance fee is 20% of what exceeds IPCA+8% per year.
The size of the new product is expected to larger than that of Itaú Algarve Legal Claims I CP FIM, which raised R$300 million, although it currently has R$475 million in assets, including co-investments offered to shareholders when subsequent opportunities were identified that exceeded the fund’s concentration limits.
“Itaú Algarve Legal Claims II will work with a class of assets that are uncorrelated with others in the financial market, with a history of resilient returns over time and comparable to private equity investments, but with a shorter duration,” says Sergio Goldstein, partner and head of structured credit at Itaú Asset. “Our differential in offering this opportunity is our ability to find assets with a high degree of legal certainty, and to structure transactions with a capital protection bias and conservative payout time scenarios.”