BRAZIL Trends and Developments Contributed by: Ana Carolina Nomura and Flávio B. Lugão, Mattos Filho
A Challenging Yet Transformative Year The macroeconomic climate has tested the limits of the financial markets both in Brazil and globally in 2025. Persistently high interest rates, fiscal uncer - tainties, political volatility and a restrictive credit cycle all combined to create a complex backdrop for asset managers and investors. For many, the expectation was that this environment would lead to stagnation and retrenchment. Instead, the Brazilian funds indus - try delivered an unexpected response – that of active resilience rather than mere survival. Instead of adopting a defensive stance, managers demonstrated agility, sophistication and creativity in reinventing structures, rebalancing strategies, and leveraging regulatory tools to identify opportunities in adversity. This ability to pivot under pressure reflect - ed the growing maturity of Brazil’s investment funds framework, coupled with the technical expertise of fund managers, fiduciary administrators, advisors, and legal practitioners. The country’s regulatory sophistication and diversity of its vehicles played a crucial role, allowing more cre - ative, complex, and tailored responses. In this sense, 2025 constituted not just a test of resilience, but a turning point where sophisticated players in the Brazil - ian funds industry confirmed their ability to navigate volatility and even convert it into a source of competi - tive advantage. Regulatory maturity: CVM Resolution 175 in practice Two years into its implementation, CVM Resolution 175 has transitioned from early-stage adaptation to full-scale operationalisation and strategic application. The early years were dominated by system upgrades, operational adjustments and compliance efforts. The regulation has demonstrated its true value in 2025 – enabling creative, sophisticated structures aligned with both domestic realities and international stand - ards. Fund managers and advisors embraced the rule’s flex - ibility in a practical way. Classes and sub-classes of shares, differentiated economic and voting rights, and clear rules on asset segregation moved from theoreti - cal or rare innovations to everyday structuring tools,
even for retail investors. For example, hybrid funds combining private equity with credit strategies, or multi-asset platforms targeting distinct investor bases within a single vehicle, became more commonplace. In practice, these tools allowed managers to build bespoke risk-return profiles within the same umbrella structure, creating efficiencies in governance, cost allocation, and investor alignment. The introduc - tion of differentiated rights also made it possible to design fundraising strategies tailored to various types of investors, from high net worth individuals seeking more risk to institutional investors demanding more stable, senior tranches. Resolution 175 has been instrumental in reinforcing Brazil’s reputation as a jurisdiction capable of offer - ing fund structures aligned with global best practices. FIPs under regulatory reform At the same time, another significant regulatory devel - opment gained momentum in 2025: the comprehen - sive reform of private equity funds (FIPs) under Annex IV of CVM Resolution 175. The new rules, currently under public consultation and expected to be enacted in December 2025, are designed to modernise and expand flexibility for FIPs – a critical segment for pri - vate equity and venture capital strategies in Brazil. In addition to provisions applicable to FIPs in general, the proposed changes specifically seek to remove long-standing barriers that have historically hindered the full development of venture capital funds in the country. The expectation is that FIPs will become more flexible, tailored, and less bureaucratic vehi - cles, reducing maintenance costs and facilitating the genuine internalisation of venture capital structures in Brazil. This has been one of the industry’s long- standing demands, particularly given the fiscal inef - ficiencies of traditional offshore structures in exit sce - narios. The new FIP framework in Brazil is viewed as a “free option” – an efficient, tax-advantaged platform capable of supporting exit strategies both in Brazil and abroad. Key innovations under discussion are as follows.
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