| SAO PAULO
SAO PAULO Feb 11 CSHG Fundo Verde FIC FIM, a
hedge fund managed by Credit Suisse Group's Luis
Stuhlberger, posted a slight loss in January as unexpected
market risks in the United States and China and worries about
Brazil's economic imbalances weighed on the value of the fund's
According to a letter to investors distributed on Tuesday,
the Brazil-based fund shed 0.06 percent, its first loss in four
months. The loss compared with a return of 0.84 percent in
Brazil's benchmark CDI interbank interest rate for the month,
the letter said.
January's loss stemmed from the fund's exposure to stocks,
which offset gains in currencies and stable returns from
fixed-income investments, the letter said. Stuhlberger oversees
more than 20 billion reais ($8.3 billion) in assets at Verde as
chief investment officer of Credit Suisse Hedging Griffo, the
Swiss bank's asset management division in Brazil.
"There was in fact excess optimism in prices, which was
corrected throughout January and the start of February," the
letter said, referring to economic data in the United States.
The combination of more uncertainty in U.S. and Chinese markets
"is particularly toxic" for emerging market assets, it added.
When Brazil's local problems - which the letter did not
spell out - mix with rising global uncertainty, the lack of
adjustment in, for instance, the country's exchange rate "ends
up hampering mainly other assets classes," such as stocks, the
letter said. "Over time and randomly, we believe that this
situation will normalize," the letter said.
The turmoil in emerging markets, despite the perception that
it is mainly a by-product of the woes facing the U.S. and
Chinese economies, "won't end because of a decision by the
Federal Reserve or the Chinese Communist Party," the letter
Instead, it will end, "as most crises do," when asset prices
compensate investors for the risks taken and the perception of
economic policies in emerging economies improves, the letter
"Prices have already started to adjust and, in some cases,
polices too. But this movie is far from over," the letter added.