Risky Credit Product That Burned Investors in Brazil Beckons Once Again

A risky investment product that lets individuals take a stake in Brazil’s vast agribusiness industry is back in the spotlight after a brutal year of losses marked by farm bankruptcies and defaults.

Known as Fiagros, the credit instruments operate like a closed-end fund, pooling capital primarily from retail investors and allocating it to a range of agricultural assets, typically receivables. Since launching in 2021, they grew to manage as much as 44.7 billion reais ($8.1 billion) worth of assets and financing everything from food giants such as JBS NV and BRF SA to small, rural producers.