1. Announcement: Moody's assigns Investment Manager Quality of MQ2 to Advis
Investimentos
Global Credit Research - 05 Apr 2012
Sao Paulo, April 05, 2012 -- Moody's América Latina has assigned an investment manager quality assessment
of MQ2 to Advis Investimentos. The MQ2 assessment reflects Moody's view of the asset manager's very good
investment management quality and control environment. As of February 2012, Advis Investimentos' assets
under management totaled BRL4.1 billion.
Advis Investimentos commenced its operations in 1997 as a financial consulting firm, providing financial
advisory services to private clients. In 2003, the company created the Wealth Management area, dedicated to
help clients in defining a life project and develop long-term strategies to address their needs. In 2005, the
company created the Asset Management area, focusing on multimarket funds. Advis Investimentos follows an
investment process that combines qualitative and quantitative tools for portfolio and risk management,
focusing on consistency of performance and capital protection.
RATING RATIONALE
According to Moody's, Advis Investimentos' rating reflects the company's disciplined investment process --
focused on consistency of performance and capital protection -- its effective risk management controls, the
high level of expertise and qualifications of its professionals, as well as very good risk-adjusted performance of
its funds. Conversely, the company's manager quality assessment is constrained by the relatively short track
record of its funds as well as the challenges Advis Investimentos will likely face in a highly competitive market
for asset management services.
Advis Investimentos' investment management process relies on qualitative frameworks for macroeconomic
analysis and on quantitative tools for portfolio construction and risk management. The process involves a top-
down approach, the construction of probabilistic scenarios and the study of the behavior of several asset
classes in each scenario. The investment process goes through the choice of risk factors, levels of exposition
to these factors, suitable assets to achieve the expositions and levels of risk for each of the funds. The portfolio
construction is based on a proprietary model that defines net-exposures to the risk factors and incorporates
rigorous stress-tests. The implementation of the strategies uses covariance matrices of the returns of the
assets and defines their absolute weights in the portfolios. The funds are managed by the investment
management team, rather than one manager, which, as a result, mitigates key-man risk exposure.
Moody's commented that Advis Investimentos follows very good risk management and control practices and
procedures, both at a fund and at the company levels. Advis Investimentos counts on a proprietary model and
on a non-proprietary software to manage risk. The risk management team consistently and strictly monitor the
set guidelines and exposure limits, considering value-at-risk (VaR), risk factors, tail risk, Stressed-VaR,
expected shortfall, and stress scenarios, as well as overseeing critical risks to the investments made, such as
liquidity and leverage.
With regard to Advis Investimentos investment performance, Moody's noted that the asset manager's risk-
adjusted results were very solid and the company´s funds have outperformed their respective benchmarks and
most of those of local peers. Based on Moody's analysis of the risk-adjusted performance of the local funds,
Advis Investimentos´s equity and multi-market funds have ranked as the top performers in the local market.
According to Moody's, Advis Investimentos MQ2 assessment could be upgraded if the following occur: a) its
risk-adjusted investment results are sustained over a long period; b) Advis Investimentos continues to expand
its funds distribution reach, including internationally; and/or c) total assets under management maintains strong
and sustainable growth. Conversely, the MQ assessment would face downward pressure if the company's
funds risk-adjusted investment performance deteriorate, funds experience a substantial decrease in assets
under management or there are significant deviations in the firm's process that increase operational risks.
Headquartered in São Paulo, Advis Investimentos is an independent asset manager focused consistency of
performance and capital protection. As of February 29, 2012, its total assets under management amounted to
BRL4.1 billion (US$2.4 billion).
2. BRL4.1 billion (US$2.4 billion).
Moody's MQ2 Investment Manager Quality assessment indicates a very good management and control
environment. The assessments, which are expressed using a scale from MQ1 to MQ5, incorporate Moody's
assessment of an entity's investment management activities and other management characteristic, including,
as applicable, the performance of its product offerings, its financial profile, and client servicing performance.
The principal methodology used in rating Advis Investimentos Ltda. (Advis Investimentos) was "Moody's
Approach to Investment Manager Quality (MQ) Assessments of Asset Managers", published in August 2011.
NOTE: Moody's Investment Manager Quality ratings do not indicate a company's ability to pay a fixed financial
obligation or satisfy contractual financial obligations, either in its own right or any that may have been entered
into through actively managed portfolios. Also, the ratings are not intended to consider the prospective
performance of a portfolio, mutual fund or other investment vehicle with respect to appreciation, volatility of net
asset value, or yield.
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Diego Kashiwakura
Asst Vice President - Analyst
Managed Investments Group
Moody's America Latina Ltda.
Avenida Nacoes Unidas, 12.551
16th Floor, Room 1601
Sao Paulo, SP 04578-903
Brazil
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Daniel Serrao
Associate Managing Director
Managed Investments Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's America Latina Ltda.
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Brazil
JOURNALISTS: 800-891-2518
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