Brazilian investment tastes changing due to economic turbulence

Brazil’s super rich have changed their investment tastes as a result of the country’s ongoing economic turbulence and are now ploughing money into items that are less attention-grabbing than supercars and ostentatious bling.

Many wealthy families and investors are now said to be shying away from the spotlight and, while in the past they may have been tempted by enormous mansions and luxurious jewels, they are now keen to maintain a low profile. Even one of the country’s richest men, former oil baron Eike Batista, who was once famous for his lavish taste in investment cars, properties and clothes, has shirked the column inches and mostly vanished from public view.

Daniela Falcão, executive editor of Edições Globo Condé Nast, told the Financial Times: “People used to open their homes a lot for any Vogue event. They want to maintain a low profile and you can’t hold Vogue events with them any more.”

With the former vice-president, Michel Temer, having rolled out a cap on budget spending over the coming two decades in a bid to stop growing Government debt, the Ibovespa, the São Paulo stock index, has risen by around 44 per cent over the course of this year and, in turn, has strengthened Brazil’s real, which now sits at around 22 per cent against the dollar.

However, this positive news for the economy does not mean that the country’s wealthy are returning to their old investment ways, but neither does it meant that they are no longer on the look out for investments. Instead, they are injecting their capital into lower-key assets that entice less interest from others, such as impact investing, forestry and other sustainable investments.

Art fairs are proving popular once again, with classic pieces from established artists selling well against the newer works of fashionable artists who may have fallen out of favour by next year. One recent art fair, SP-Arte, attracted 27,000 visitors, which was a record number, and sales were thought to be between $5.5 and $6.7 million, according to the fair’s organisers.

Ms Falcão said that investing in the art sector ‘satisfied’ buyers’ ‘need to consume’ without drawing large amounts of attention to their purchases. “No one is going to know what you bought; it’s in your house; only your friends might see it,” she said.

Fashion has also seen much change in the country in recent months, with the ongoing popularity of high end brands including Versace and Hermes doing well in the Brazilian marketplace. However, many of the country’s national fashion brands did not fare so well, especially those targeting the mid-range buyers. Indeed, Ms Falcão told the newspaper: “Our international advertisers . . . in general remained stable or increased their investment but the national fashion market, on the other hand, has entered into collapse.”

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