#MANA11 - NÃO É HEDGE FUND!

Summary

In this detailed analysis of the Mana 11 real estate investment fund, the speaker evaluates its composition, highlighting that it primarily focuses on fixed income (90%) with a small allocation to real estate and equities. The speaker explains the fund’s strategy of generating extraordinary gains through credit operations, the impact of interest rates, and its relatively high dividend yield due to its discount to NAV. Despite its claims as a 'red fund,' it is more of a paper-based fund. The analysis also compares Mana 11 to other funds like CVBI, assessing their performance, risks, and the strategy behind each.

Takeaways

• 😀 Mana 11 is primarily a fixed-income fund, with 90% of its portfolio in fixed-income assets, around 80% in CRIs (Credit Receivables Investment Securities), and 10% in cash. It is not a traditional high-risk hedge fund as it might initially appear.
• 😀 The fund's current market price is at a 20% discount to its net asset value (NAV), which increases its dividend yield, especially in the current high-interest rate environment.
• 😀 Mana 11 generates a significant portion of its revenue through the sale of CRIs at a profit, known as extraordinary gains. This strategy, while considered non-recurring by many, has been a recurring source of income for the fund.
• 😀 The fund's manager, Manati, originates its own credit operations, allowing it to sell CRIs with profit by compressing the spread between the interest rate it originates (e.g., IPCA + 9) and what it sells them for (e.g., IPCA + 8).
• 😀 Mana 11 has a relatively high dividend yield, boosted by its discount and the profits from selling CRIs at a favorable margin, making it attractive to yield-seeking investors.
• 😀 The fund's report is overly detailed and lacks logical structure, making it challenging for investors to quickly understand key information. A more concise and focused report would be beneficial.
• 😀 Mana 11’s risk profile is medium, as it mainly invests in CRIs, which can be sensitive to interest rate changes. However, the fund has successfully managed to limit losses from interest rate fluctuations due to its strategic credit purchases.
• 😀 The fund’s dividend yield is currently one of the highest among similar funds, but the yield is mainly due to the discount on its NAV and the gains from credit origination, not due to superior underlying assets or performance.
• 😀 Mana 11's portfolio includes a mix of fixed-income assets and real estate funds, with around 15% allocated to the latter. However, it is still largely dependent on the performance of its CRI investments.
• 😀 Compared to larger funds like CVBI, Mana 11 offers higher dividend yields but comes with the risk of lower diversification and smaller scale. Investors should carefully weigh the trade-off between higher yield and the fund's overall risk profile.
• 😀 The fund’s credit origination strategy has allowed it to purchase CRIs at favorable terms in recent years, positioning it to perform well even in a high-interest rate environment. However, potential investors should remain cautious due to the fund's size and risk exposure.

Q & A

What is Mana 11, and what type of investment fund is it?

Mana 11 is a real estate investment fund (FII) focused on a portfolio of *CRIs* (Certificados de Recebíveis Imobiliários), with some exposure to real estate funds (FIIs) and stocks. Despite its name, it is not a hedge fund, as the majority of its portfolio (about 90%) is in fixed-income assets, primarily *CRIs*.

Why is Mana 11 often misunderstood as a hedge fund?

Mana 11 is often mistaken for a hedge fund due to its name and the initial expectations that come with it. However, the fund is predominantly focused on fixed-income investments, with over 90% of its portfolio in *CRIs*. It does not follow a typical hedge fund strategy, which usually involves diversified risks and more asset classes.

How does Mana 11 generate additional revenue?

Mana 11 generates additional revenue by originating *CRIs* and then selling them at a profit. This is done by purchasing *CRIs* at a higher rate (e.g., IPCA + 9%) and selling them at a lower rate (e.g., IPCA + 8%), allowing the fund to pocket the difference as extraordinary gains.

What are the key advantages of Mana 11's investment strategy?

Mana 11's key advantages include its ability to originate *CRIs*, which allows it to achieve a compression of rates and sell them at a profit. This strategy has led to relatively high yields, particularly when compared to other funds in the market, especially during periods of high interest rates like the current one.

What risks should investors consider when investing in Mana 11?

Investors should be aware of the risks associated with the high concentration of *CRIs* in Mana 11's portfolio, including potential defaults or fluctuations in the real estate market. Additionally, the fund’s reliance on the performance of its *CRIs* means that its profitability can be impacted by macroeconomic conditions, such as changes in interest rates.

What is the current dividend yield of Mana 11, and what factors influence it?

The current dividend yield of Mana 11 is higher than usual due to its trading at a discount to its Net Asset Value (NAV) and the compression of rates on its *CRIs*. This discount results in a higher dividend yield for investors compared to the original expected yield.

How does Mana 11's portfolio composition compare to other real estate funds?

Mana 11’s portfolio consists mainly of fixed-income assets, with around 90% in *CRIs*, 15% in real estate funds, and a small portion in stocks. This makes it more conservative than other real estate funds that may have a higher allocation to real estate equity. It also focuses on *CRIs* that offer higher returns, but with the corresponding risk of exposure to market conditions.

What are the key differences between Mana 11 and other funds like *CVBI* or *KSC*?

The main difference between Mana 11 and other funds like *CVBI* or *KSC* is the higher yield offered by Mana 11, primarily due to its discount on the NAV and the compression of rates on *CRIs*. However, *CVBI* and *KSC* are much larger funds with more diversified portfolios, while Mana 11 is smaller and less diversified, relying heavily on *CRIs* and credit operations.

How has Mana 11's management strategy impacted its growth and portfolio size?

Mana 11's management strategy, which includes originating *CRIs* and taking advantage of favorable interest rates, has enabled the fund to significantly grow its portfolio. The fund doubled in size in 2024, in part due to issuing new shares and attracting additional investors.

What is the potential for future growth in Mana 11's portfolio?

Mana 11’s future growth potential lies in its ability to continue originating profitable *CRIs*, as well as potentially diversifying its portfolio further. The fund has indicated plans to diversify its investments and reduce its reliance on fixed income and *CRIs*, which could help mitigate risks and offer more stability in the long run.