By Brazil Stock Guide – Previ, the pension fund of Banco do Brasil, announced plans to divest approximately $1.4 billion (R$ 7 billion) in equities, reducing or exiting positions in 12 companies. The decision, disclosed by Previ’s president João Fukunaga to Broadcast, follows underwhelming returns from its equity investments, including low dividend payouts. Among the firms affected is BRF (BRFS3), from which Previ has already sold about $400 million (R$ 2 billion) worth of shares.
Fukunaga explained that the divestment is part of a broader strategy to reallocate funds into government bonds, specifically NTN-Bs (Brazilian Treasury Notes Series B), aiming to “immunize the liability” of the pension fund. “We are making the divestment because we believe there is space, from an equity perspective, to exit and buy NTN-Bs,” Fukunaga said, according to IstoÉ Dinheiro.
“This aligns with our strategy of liability immunization.” Some operations are still ongoing, and as a result, the names of the companies involved have not been disclosed. All actions remain consistent with Previ’s investment policy, which has been approved by its board and the Deliberative Council.
The divestment occurs amid a positive shift for Previ’s Plan 1, which has posted a surplus of R$ 1 billion ($200 million) for 2025, rebounding from previous losses. The plan achieved a return of 1.84% in August and is up 8.97% year-to-date, driven by strong performance in equities, which rose 13.4% through August. In contrast, international investments fell by 3.7%. “The result confirms everything we’ve been saying since the annual results in March – these are moments of market dynamics,” Fukunaga noted.
Previ’s total investment results for 2025 reached R$ 19 billion ($3.7 billion), with R$ 7.7 billion ($1.5 billion) in equities, R$ 10.5 billion ($2 billion) in fixed-income investments, and R$ 0.8 billion ($150 million) in other assets. This performance has helped offset a significant deficit of R$ 17.6 billion ($3.3 billion) reported in 2024, following a surplus of R$ 14.5 billion ($2.8 billion) in 2023.
However, Previ’s operations are under scrutiny by the Brazilian Court of Audit (TCU), which launched an investigation into potential irregularities in the fund’s investment and divestment processes, the selection of board members for invested companies, and the sale and leasing of properties. A decision from the TCU is still pending.