We are operators, not nuns. Debate does not mean crossing certain lines.
SPX's flagship Nimitz fund lost 5.5% in March and has underperformed Brazil's 14.5% benchmark rate for three of the last four years, triggering client exodus. High interest rates in Brazil have redirected investor capital from hedge funds to fixed-income accounts, forcing sector-wide restructuring of the once-booming industry.
- SPX assets fell from 80 billion reais to 49 billion reais as clients withdrew
- Nimitz fund lost 5.5% in March 2026, worst month in 16 years
- Fund underperformed Brazil's 14.5% benchmark rate for three of last four years
- Xavier founded SPX in 2010 with Pandolfi and Schneider; now Pandolfi controls most assets
- Firm closing London and Manhattan offices, keeping only Abu Dhabi expansion
SPX Capital, Brazil's largest independent hedge fund, undergoes major restructuring after years of underperformance, with founder Rogerio Xavier ceding control of most assets to partner Bruno Pandolfi and closing international offices.
Rogerio Xavier wants the record straight. There was no coup, he insists—no physical altercations, no orchestrated power grab when the board of SPX Capital met one afternoon in early May. What happened instead was messier and more mundane: a firm that had dominated Brazilian finance for two decades simply stopped working.
Xavier, who built SPX into the country's largest independent hedge fund, has been sidelined. He now manages far less money. His ambitious international expansion—sleek offices in London's Mayfair district, a Manhattan presence on Park Avenue—has been dismantled. Bruno Pandolfi, his partner since the firm's founding, has taken control of most client assets. The conversation between them, Xavier says, was just "firm talk." "We are operators, not nuns," he offered by way of explanation. "Debate does not mean crossing certain lines."
But the numbers tell a different story. SPX's assets under management have hemorrhaged from over 80 billion reais—roughly $16 billion—down to 49 billion reais in recent years as clients fled mediocre returns. In March, things accelerated downward. Market turbulence triggered by geopolitical tensions in Iran caught the firm off guard. Nimitz, SPX's flagship fund, suffered its worst monthly loss in sixteen years: down 5.5 percent. The fund has now underperformed Brazil's benchmark interest rate—currently 14.5 percent—for three of the last four years. In the first five months of 2026, Nimitz managed only a 0.8 percent gain, a trajectory that would mark its third consecutive year of lagging the rate.
Xavier, fifty-nine, acknowledged his share of blame during an interview in Manhattan last month. He was there for meetings, working out of temporary offices after the firm had surrendered its Park Avenue lease to cut costs. "We have had three or four years of mediocre performance," he said. "We are here to work for investors. If things do not work, then they have to work." He was particularly critical of his own recent investment strategy—too short-term, too scattered, chasing small gains while missing larger opportunities. The approach had left him blind to events like the March oil price surge.
Xavier's struggle reflects a broader crisis in Brazilian hedge funds. For years, the sector boomed as investors chased higher returns. But when inflation spiked after the pandemic and interest rates climbed back into double digits, the calculus shifted. Money that once flowed to hedge funds now simply sits in fixed-income accounts earning the benchmark rate. Samuel Ponsoni, a partner at Outliers Advisory in São Paulo, described the current environment as "extremely challenging." High rates, competition from fixed income, and disappointing long-term returns continue to trigger capital outflows.
SPX's international gamble, once a source of pride, became a liability. Xavier, Pandolfi, and Daniel Schneider—the three cofounders—had moved to London in 2016 to signal that SPX was more than a Brazilian shop. For a time, it worked. The firm influenced interest-rate markets in Mexico, competed with Ken Griffin's Citadel in Hungary, and scored a major bet on U.S. rate increases that delivered 12 percent annual returns through 2022. But when performance deteriorated, it was ironically a series of failed bets in Brazil itself that deepened the crisis.
The restructuring is now underway. Pandolfi will return to Rio de Janeiro to oversee macroeconomic strategy. Two other senior partners, Marcelo Castro and Marcella Libardoni, have left. Schneider is relocating to Abu Dhabi, the only new office SPX is opening, to serve Middle Eastern clients. London and Manhattan are closing. Xavier will work from Cascais, a coastal town outside Lisbon, where SPX has maintained a quiet presence for years.
Xavier's path to finance was improbable. The son of a postal worker and a teacher, he stumbled into the industry through a Playboy magazine article about a currency trader who made millions betting on Asian currencies. He studied business administration, joined Banco Garantia in 1985, and spent two decades climbing the ranks at BBM before leaving with Pandolfi and Schneider in 2010 to start SPX. In those early years, extraordinary returns made him a star. He shared conference stages with Luis Stuhlberger, the godfather of Brazilian hedge funds, and spoke without filter about economics and politics. In early 2023, he publicly criticized the government's budget plans while the finance minister sat in the audience. SPX was still riding high then, fresh off its American interest-rate triumph.
Now Xavier is searching for a way to restore investor confidence. He acknowledges that clients—particularly foreign ones—have grown frustrated with dispersed decision-making. "In an organization where several people make decisions, actually nobody decides anything," he said. That is why Pandolfi now leads most of the firm's portfolio managers. Xavier says the firm has an obligation to acknowledge its mistakes. Whether that admission, and the restructuring it has prompted, will be enough to stop the exodus remains unclear.
Citas Notables
We have had three or four years of mediocre performance. We are here to work for investors. If things do not work, then they have to work.— Rogerio Xavier, SPX founder
The current environment is extremely challenging. High rates, competition from fixed income, and disappointing long-term returns continue to trigger capital outflows.— Samuel Ponsoni, Outliers Advisory
La Conversación del Hearth Otra perspectiva de la historia
When you read that Rogerio Xavier was "relegated" to managing less money, what does that word actually mean for someone who built the firm?
It means he went from being the architect of everything to being one voice among many—and now, a smaller voice. He still owns the most shares, but control over the capital, the strategy, the daily decisions—that's gone to Pandolfi. For someone accustomed to running the show, that's a profound loss of authority.
The article mentions "heated conversations" between Xavier and his partners. Do you think the tension was really just about performance, or was there something deeper?
The performance was real—the numbers don't lie. But I suspect the deeper issue was philosophical. Xavier wanted to keep swinging for the fences internationally. Pandolfi and the board wanted to consolidate, to stop bleeding money on London and Manhattan offices. When you disagree on that level, conversations get heated.
Why did interest rates rising in Brazil hurt SPX so badly? Shouldn't a hedge fund be able to adapt?
In theory, yes. But SPX had built its reputation on beating the benchmark. When the benchmark became 14.5 percent just by sitting in a savings account, suddenly you need to be exceptional to justify your fees. SPX wasn't exceptional anymore. Clients did the math and left.
The story mentions Xavier learned about finance from a Playboy article. Does that detail matter, or is it just color?
It matters because it shows how contingent his entire career was. One magazine, one article, one moment of curiosity—and a postal worker's son becomes a hedge fund titan. It makes the fall feel more human. He wasn't born to this. He earned it. And now he's losing it.
What does Abu Dhabi mean for SPX's future? Is that a real strategy or just saving face?
It's probably both. Keeping one new office lets Xavier tell investors, "We're still international, we're still ambitious." But realistically, it's a retreat. They're closing the glamorous offices and opening one in the Gulf to chase wealthy clients there. It's strategic, but it's also an admission that the London dream is over.