Brazil's FIDC market expands into distressed credit amid Selic cut

Fundos de Investimentos em Direitos Creditórios (FIDCs) in Brazil are drawing investor interest despite a slowdown in private credit. In 2026 the segment raised R$30.64 billion and now holds about R$770.31 billion in assets, rivaling equity markets. Funds are increasingly targeting non‑performing loans, distressed assets and debtor‑in‑possession (DIP) financing, a shift highlighted by Richard Ionescu, CEO of Grupo IOX, who says stressed‑credit structures will gain space in selective cycles.

The Central Bank’s recent Selic cut to 14% has prompted analysts to assess spread dynamics. Fernando Moreira of Intra Asset expects FIDCs to remain attractive for diversification, while Rodrigo Mendonça of Valor notes spreads could rise to offset lower nominal returns. Edgar Araujo of Azumi Investimentos adds that high‑quality funds with diversified, well‑protected portfolios may sustain appeal without large spread hikes. Overall, experts anticipate continued growth of the FIDC market, even as interest‑rate policy evolves.