There can be no doubt that hedge funds are growing in Latin America. In fact information released by Eurekahedge indicates that, by the summer of 2011, the number of hedge funds connected with the region had quadrupled over the funds available to investors just ten years previously. While some of these funds are based entirely in Latin American countries, others are created and managed by concerns based in other areas of the world. Despite this, they still include holdings within the funds that are directly connected with one or more Latin American nations.

A reputable example of a Latin American hedge fund is that offered by Gávea Investimentos, which is based in Brazil. This particular fund is considered to be highly stable, one of the best options for hedge fund investment. In fact, Highbridge Capital, a company owned by JP Morgan Chase, acquired a majority interest in the fund during the early part of 2010. This purchase is indicative of the trend of hedge funds based in other countries seeing Brazil as being a great way to break into the Latin American market, either by setting up operations in one of Brazil’s major cities or buying into some of the domestic hedge funds already in place.

The Compass Latin America Horizons Fund has also emerged as an important up and coming fund over the last couple of years. Riding the wave of the expansion of hedge funds throughout the region, this one may be based in the US, but it is made up of holdings that are domestic to several nations in Latin America.  

Hedging-Griffio’s Verde fund is also well established, but is dedicated to systematic growth. This has led to situations in which not everyone who wants to participate in the fund is able to do so, even those who are willing to commit to a longer term. Considered to be one of the top performing hedge funds in, not only Latin America, but also the entire world, the waiting list is long and not likely to reduce by any measurable amount anytime soon.

Another highly successful fund is Tarpon HG Fund-A, an offshore fund that enjoyed an annualised return of 30 percent for the period between 2005 and 2010. While considered somewhat riskier than onshore funds, this hedge fund also offered a little more diversity than the onshore funds, which normally stick closely with stocks and bonds as the holdings of choice.  

One of the attractions of Latin American hedge funds is that they tend to become established quickly and are highly unlikely to fail. Even during the worldwide recession of 2007 to 2010, hedge funds associated with the region continued to perform well and were able to weather the storm, sometimes even posting gains while other types of investment funds were floundering. This durability continues to enhance the reputation of the larger funds, while also prompting investors to consider some of the newer hedge funds more positively.