Brazil's Icatu creates int'l pension fund with BlackRock

Brazilian insurance company Icatu Segurosis launching a pension fund that will invest in international markets.

Icatu partnered with global asset manager BlackRock to create the fund, Icatu said in a release posted on insurance sector blog Sonho Seguro.

The pension fund is the first of its kind in Brazil and the goal is to attract 100mn reais (US$31.5mn) from investors in the first year, said Icatu.

The new fund provides "an important diversification option" at a time of falling interest rates in Brazil, said Felipe Bottino, who is Icatu's pension product director.

With inflation comfortably below target, Brazil's central bank has made a series of aggressive reductions to its Selic base rate.

In September, the monetary authority cut the Selic to 8.25% from 9.25%, marking the eighth consecutive reduction and the fourth consecutive cut of a full percentage point.

The Selic is now at its lowest level since May 2013, when it was at 8%, and economists foresee more cuts in the coming months.

Last month saw Brasilprev, one of Brazil's largest private pension plan providers, launch a new investment strategy to offer higher returns.

The strategy included four new investments funds, two based on fixed-income assets, called FIX Estratégia 2025 and Fix Estratégia 2035, and two linked to equities, called Dinâmico and Multiestratégia.