Singapore’s GIC ‘hopeful’ on Brazil

SAO PAULO • Singapore’s sovereign wealth fund GIC Pte Ltd has grown more optimistic about Brazil.

Latin America’s largest economy may offer investment opportunities in sectors from healthcare to education and gas pipelines if it keeps inflation under control and reduces interest rates, according to Lim Chow Kiat (picture), the fund’s CEO.

“I’m definitely more hopeful and positive,” Lim said in an interview in Sao Paulo. “The momentum looks good.”

The first step is the approval of a much-delayed overhaul to the country’s pension system. Last month, the economic team presented a proposal that would generate one trillion reais (RM1.08 trillion) in savings in the next decade, a plan Lim called “ambitious”.

As the bill begins to make its way through Congress, the CEO is “cautiously optimistic” about approval chances. “We have to see how much they can get through,” he said

GIC has invested in Brazil for almost two decades. “The past five years were not easy for businesses and investors, but we managed to do some really good investments, partly because we stayed,” he said. “Some of our friends packed up and left. We never did.”

GIC invests 3% of its resources in Latin America, 32% in the US, 19% in Asia (excluding Japan) and 13% in the eurozone, according to a 2018 report.

Brazilian companies in its portfolio include foodmaker BRF SA, private hospital chain Rede D’Or Sao Luiz SA and gas pipeline operator Nova Transportadora do Sudeste SA. It doesn’t break down how much of its portfolio is allocated to Brazil. Lim declined to give details on the fund’s positions.

Lim expressed concern about the global economy, adding that valuations are still high amid dimming growth prospects. A slowdown in the US economy “is almost inevitable”. — Bloomberg