Hedge Funds: Gerken launches new regional fund

Hedge funds should broaden their horizons beyond Brazil to the rest of the region in their search for yield, says Lou Gerken, chief executive of Gerken Capital Associates (GCA). Although there are 148 hedge funds in Latin America, only nine are not based in Brazil and solely focused on the region’s biggest economy. But now it would seem that investors, such as GCA, are seeing an opportunity across the region as countries such as Peru and Colombia, as well as Brazil and Mexico, are set firmly on the route towards investment-grade status. On top of this, liquidity in the region has been improving, although mostly in Brazil, which can now give funds a choice of nearly 60 stocks to short.