XP closes BRL 1.2 billion funds to finance startups and unlisted companies in Brazil

XP Asset raised the amount for a new fund that will buy quotas for venture capital and private equity

Guilherme Benchimol XP's CEO
Guilherme Benchimol, XP's CEO. Photo: Guilherme Benchimol's LinkedIn
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  • XP Selection Alternativo raised BRL 1.2 billion, in the maximum amount of the offer and being oversubscribed;
  • With more than 10,000 quotaholders, the product, which was previously accessible only to professional investors (above BRL 10 million), was offered to qualified investors for the first time and represents a historic milestone for this market.

On Wednesday, Guilherme Benchimol, CEO and founder of XP Investimentos, announced that the company closed a new fundraising of BRL 1.2 billion for 10,000 investors, forming a new venture capital fund, focused on investments in startups and over-the-counter companies in Brazil.

The initial offer of the XP Selection Alternativo fund had a demand well above the initial projections. The initial proposal, to raise BRL 835 million, was raised to BRL 1 billion, but the actual funding ended up being higher than this amount, reaching BRL 1.2 billion. With a consolidated total of more than 10,000 quota holders, the fund is already born as the largest in its category.

“XP Selection Alternativo is a milestone in the country’s alternative funds industry. Until then, this type of product was not accessible to individual investors. This launch reinforces XP Asset’s position as the manager with the most complete product range in the country ”, reinforced Bruno Castro, CEO of XP Asset Management, in a press release.

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Previously, a fund of alternative funds was available in Brazil only to so-called professional investors – those with more than BRL 10 million in financial investments. XP Alternative Alternativo was the first accessible path to qualified investors (those with financial investments greater than R $ 1 million), with a minimum initial investment of BRL 50,000.

“With the launch of this product, we are taking another step towards democratizing investments, a characteristic that has been part of XP’s DNA since its foundation”, explains Jorge Lange, manager of the new product. XP Selection Alternativo will buy shares of primary emissions, as well as of the secondary market and will be able to make co-investments with recognized managers of the sector.

The profitability target will be IPCA (The Extended National Consumer Price Index, the reference for the Brazilian inflation-targeting system) + 20% per year, with a management fee of 1.25% in the first four years, falling in the following years, and a performance rate of 10% if the fund reaches at least IPCA + 7% per year of returning income.

The first four years of the new product will be dedicated to the formation of the portfolio. “It will be an excellent opportunity to diversify the portfolio with assets with good profitability potential, something that the investor has already realized, considering the high demand already at the launch”, highlights Amabile Rebeschini, co-manager of the fund.

Another advantage is the fact that, when opting for private equity, the investor opens up a variety of options far superior to that of the less than 400 companies currently listed on the Stock Exchange. “It is an opportunity traditionally ignored by the investor,” explains Amabile.

“This fund means more capital for entrepreneurs, who will continue to innovate and strengthen their businesses and, above all, the democratization of investment products, before accessible only to millionaire clients,” said Benchimol, in a LinkedIn post.

READ ALSO: Brazil’s largest brokerage firm, XP announces that its founder Guilherme Benchimol will no longer be its CEO

According to Benchimol, the means to transform Brazil are low interest rates in the long run (more jobs, income, innovation, and opportunities for the entire population). “We continue to stand firm, transforming the financial market to improve people’s lives.”

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