Amid global turmoil, Brazil stands out on the radar of international investors
- Seneca Evercore | Notícias
- 2 days ago
- 6 min read
(O Globo) War in the Middle East draws attention to opportunities in the country, mainly in commodities and energy, despite the obstacles. Addressing internal bottlenecks could stimulate investment, experts say.
The recent global geopolitical landscape — from Donald Trump's tariff wave to the war in the Middle East — has opened a window of opportunity for Brazil to attract foreign investment. And outside interest is already going beyond the successive records of the São Paulo Stock Exchange, B3, since the beginning of the year. As the dollar loses strength worldwide and investors seek business in emerging economies, long-term project prospects here are heating up, analysts and consultants point out.
Far from conflict zones and with a coveted stock of natural resources — from oil and renewable energy sources to fertile land and critical minerals — Brazil has been viewed more favorably, despite the proximity of yet another heated presidential election and persistent obstacles such as fiscal fragility and high interest rates.
The comparison with other emerging countries helps, but experts believe the movement is still well below Brazil's true economic potential. If legal and regulatory uncertainties were removed, they could help attract even more long-term capital. On the other hand, the country's risks make business here cheaper for those coming from abroad to invest.
Beyond the strong flow into the Stock Exchange, Brazilian banks and consultancies have been increasingly sought out, mainly by European and Asian groups interested in stakes in companies or entire businesses. It is still a diffuse movement, without consolidated figures, but one that is already appearing in reports and comments from financiers.
"We are seeing a better level of transactions than last year, with greater interest in Brazilian assets, including smaller companies, especially in the areas of technology, financial services, renewable energy, food, and also industrial," says Isaias Sznifer, founding partner of Seneca Evercore. "This is shaping up to be a good year for transactions."
Even so, he believes it is too early to confirm that there will be growth in foreign investment in long-term projects. On the domestic side, Brazilian businesspeople are trying to accelerate talks to close deals before the elections.
"And since we have gone a long time without an IPO (initial public offering on the Stock Exchange), we are also seeing funds recycling their portfolios, monetizing assets, selling a business to return value to investors and open new investment fronts," he says. "Transaction multiples in Brazil carry a discount compared to those in developed markets precisely because of the risks involved. That hasn't changed."
Infrastructure concessions are seen as a focal point for capturing this interest. Despite lower returns, they are more stable, long-term performing assets, experts explain. The recent revision of contracts in the airport sector, for example, resulted in greater interest from foreign groups in Galeão, in Rio. At the end of last month, the Spanish company Aena won the terminal for R$2.9 billion, 210% above the minimum auction value.
In a sign of greater appetite for Brazil, Mubadala Capital, the private investment arm of Abu Dhabi's sovereign wealth fund in the United Arab Emirates, has just formalized its third strategic fund focused on the country. The Brazil Special Opportunities Fund III totals more than US$900 million in commitments from investors interested in the country, above the initial target of US$750 million.
The plan is to acquire controlling stakes in businesses in "complex situations." Among acquisitions already completed here are the Starbucks and Subway food chains, through Zamp, the owner of Burger King.
Businesses for sale
The domestic context of prolonged high interest rates brings Brazilian businesspeople closer to outside offers. With cash flow pressured by rising capital costs, the country broke records for judicial recovery filings. Companies are carrying out financial restructurings and putting assets up for sale to avoid that outcome. In parallel, large corporations are attracting investment to the Stock Exchange.
Alberto Ramos, chief economist for Latin America at Goldman Sachs, says that under today's global conditions, assets in Brazil generally become even more attractive to outside investors who have not found more favorable prospects in other countries:
"The opportunity has increased. This has little to do with the shine and light of Brazil's macroeconomic story, but with the darkness that surrounds us. Whatever it may be, the advantage is there. It's just that, at this moment, this positive sentiment is very circumstantial."
Current circumstances end up highlighting the fact that Brazil is far from conflict zones. While the war in Ukraine drags on and the Middle East proves to be a powder keg, Latin America's largest economy does not carry that type of risk.
As a major commodities exporter — mainly of oil, minerals, and food — Brazil is experiencing a "positive shock" in trade exchanges, improving the performance of its trade balance. It also has a large consumer market, abundant energy, and a more sophisticated financial sector than most emerging markets, starting with its South American neighbors, Ramos highlights.
Roberto Dumas, chief strategist at GCB Investimentos and economics professor at Insper, also highlights the basics: Brazil is a democracy with stable institutions — despite recent challenges — has advanced in some reforms, has inflation at an acceptable level, and interest rates on a downward trajectory, the opposite trend from several other countries. But it carries its own risks, he notes:
"It's not that we became a showcase or the cover of The Economist with Christ taking off again. It's that the world is in a very bad state. Brazil still has a massive amount of homework to do."
He is referring to the British magazine's 2009 cover, which featured the Christ the Redeemer statue taking off like a rocket, alluding to Brazil's rising economic indicators. In the following years, however, the tide turned. The country lost its investment grade as risks rose in the wake of a recession. The ups and downs, combined with persistent legal and regulatory insecurities, have taken a toll on the country's assets.
Oil gains
In 2025, the Brazilian economy grew 2.3%. Last week, the International Monetary Fund (IMF) revised its forecast for the country in 2026 upward from 1.6% to 1.9%, highlighting Brazil's gains from oil exports. In the opposite direction, the IMF warned that gross public debt is expected to end the year at 96.5% of GDP, hitting the 100% threshold as early as 2027. In parallel, economists are increasingly estimating that inflation may close 2026 above the target.
The tailwind blowing from abroad in Brazil's favor is now a consensus among experts, but they also agree that resolving long-standing bottlenecks could unlock far more investment and accelerate the country's growth. In financial markets, the comment is that Brazil's internal challenges end up creating a kind of "discount" on investments directed at the productive sector.
And even where Brazil promises to be a powerhouse, such as in rare earths, the challenge follows the same tune. An executive who monitors transactions in the sector and is advising an international fund interested in investing in this area says that out of 30 projects evaluated, only two will be brought to foreign investors. The rest were discarded due to regulatory, environmental, and logistical risks.
"The United States has great interest in rare earths — it is very promising, with demand across multiple sectors. But it's not just about extraction; it's about negotiating processing. China's differentiator is its processing capacity. This opens up the possibility of exporting a good with higher added value," reflects Marcio Sette Fortes, former executive at the Inter-American Development Bank (IDB) and professor at Ibmec.
For Welber Barral, former Foreign Trade Secretary and partner at consultancy BMJ, regulation is central to this front, or distrust ends up devaluing the projects. He points out that Brazil holds the equivalent of twice the country's GDP in critical mineral reserves, but has yet to define a clear regulatory framework and strategy.
"It's not that Brazil is cheap. The country has enormous potential, but it is not better utilized due to institutional and legal fragility," says the consultant. "Weak regulation breeds distrust. And all of that ends up being priced in."
Uncertainty creates obstacles
Dumas of GCB notes that the risks, in general, are known and priced in by investors, but the climate of uncertainty blocks investment. He acknowledges recent advances such as the Tax Reform and regulatory frameworks in sectors like sanitation, but highlights as concerning, for example, the infiltration of organized crime into the financial system, as recent scandals have shown.
"The winds tend to favor Brazil a little. The magnitude of that will depend somewhat on the competence shown in addressing policies that improve this opportunity," emphasizes Ramos of Goldman Sachs. "Despite receiving more in the short term, Brazil still receives far less investment than its potential, partly due to a lack of regulatory frameworks. And there is the fiscal issue, which has worsened in recent years. Were it not for that, Brazil would clearly be flying."
The current level of the benchmark interest rate — 14.75% per year — is identified as the number one obstacle in the Brazilian economy, because it influences all sectors and company costs. But there are specific bottlenecks even in segments that are attractive to foreigners and national flagship sectors, such as agribusiness's dependence on imported fertilizers, whose supply declined with the war in Iran, Fortes highlights:
"We have a giant with its Achilles' heel completely exposed. It is necessary to expand access to raw materials for fertilizer production in the country."
Published on 04/19/2026 and available at:
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