“Brazil offers opportunities in infrastructure, credit and stock markets,” says Prisma Capital

Brazil is experiencing a period of economic maturity driven by structural reforms, and offers good investment opportunities in illiquid assets and also in the stock market, according to Marcelo Hallack, founding partner of Prisma Capital.

Hallack participated in an investment conference at EFPC (Closed Mutual Pension Groups) at the FIAP-Abrapp International Conferencewhich was held in Rio de Janeiro, on October 3 and 4. The executive identified four strategic areas for investment: infrastructure, discounted assets on the stock market, credit restructuring and special assets.

Infrastructure: “Unlimited Demand for Capital”

The need to modernize Brazilian infrastructure is one of Prisma Capital’s main focuses. According to Marcelo Hallack, “Brazil’s infrastructure stock represents only 36% of GDP, a figure significantly lower than that of developed countries. “

He says that the country invests less than 2% of annual GDP, when the average would be between 4% and 5%. “This means that more than 3 trillion reais are needed to renew and restore infrastructure in areas such as transportation, energy and sanitation,” he says.

Hallack clarifies that the demand for private capital in infrastructure is constant, regardless of the political side of the government in power.

“The need to attract private capital for mitigation projects and public-private partnerships (PPP) is a consensus among different governments.”he gives an opinion. For Prisma Capital, this represents a sustainable opportunity for investors seeking consistent returns on long-term projects.

On the stock market, attractive valuations in discount conditions

In the stock market, Marcelo Hallack sees good opportunities for those looking for long-term investments. “The Brazilian stock market operates with very low valuation multiples, around 4 to 5 times EBITDA, while developed markets trade above 10 times.he explains. According to him, this price difference reflects widespread pessimism in the market, creating a window of opportunity for investors willing to bet on future value.

Hallack points out that this undervaluation is exacerbated by a situation of political and economic uncertainty. “Although there are risks, such as interest rate volatility and political changes, anyone who takes a long-term view can make good profits in an environment with such discounted multiples,” he said.

Special assets and restructuring: “Opportunities in difficult situations”

Prisma Capital also sees great potential in special funds and credit restructuring. “Brazil, with its complex economic reality, offers many opportunities in this sector, including the purchase of non-performing credit portfolios and assets of companies in financial difficulties,” says Marcelo Hallack. show that the judgment recovery market is particularly hot, with over 6,000 companies currently restructuring and approximately 1,080 new judgment recovery applications per month.

For Prisma, these situations represent investment opportunities in companies that want to restructure their operations. “It’s a fertile market for investors who have experience dealing with distressed loans and can take positions in companies that are distressed, but with recovery potential,” Hallack said.

Customs and tax disputes: great potential

Hallack also cites the legal market as a promising area of ​​activity for Prisma Capital. “Brazil has about 6 trillion reais in tax disputes, a value greater than the total market capitalization of the companies listed on the Brazilian stock exchange,” he explains. This situation creates opportunities for Prisma to be a liquidity provider for companies that need to cash in on tax credits. “These credits can eventually be transformed into court orders, offering investors an additional form of profit.” ,” he said.

Since its founding in 2017, Prisma Capital has followed an agnostic and programmatic approach to its investments, according to the executive.

“Our role is not to pick a specific sector, but to identify the best risk-adjusted return opportunities,” he said. The strategy has produced consistent returns, with Prisma posting an average return of more than 30% annually, outperforming CDI and other market benchmarks, according to Hallack.

For Hallack, Brazil offers a promising setting for those willing to navigate the complexity and volatility of the market. “We believe that Brazil, with its reforms and growing maturity, is a market with good long-term opportunities, especially at a time of low multiples and structural investment needs, ” he concludes.