Due diligence on a Brazilian receivables portfolio: a 7-point checklist
A receivables portfolio rarely arrives decision-ready. It arrives as spreadsheets, scanned contracts, a servicer report, and a deck — often in Portuguese, rarely reconciled. Before you price anything, these seven questions tell you whether the pool is what the seller says it is.
1. Originator quality
Who created these receivables, how do they underwrite, and what is their incentive after the sale? An originator that retains a subordinated position behaves very differently from one selling its entire book.
2. Legal validity of the lastro
Each receivable must be real, enforceable, and properly assigned to the buyer. Gaps in documentation — missing signatures, broken assignment chains — are where value quietly leaks.
3. Concentration
Map exposure by obligor (sacado), sector, and geography. A pool that looks granular can hide a handful of names that, together, decide the outcome.
4. Historical performance
Read delinquency (inadimplência), recovery, and prepayment curves across vintages — not just the headline average. Seasoning and cohort behavior matter more than a single ratio.
5. Servicing and collections
Strong assets with weak collections underperform. Understand who services the book, the cure process, and the backup-servicer arrangement if the primary one fails.
6. Structure and subordination
How much loss can the structure absorb before your tranche is touched? Check subordination, triggers, and the cash waterfall under a stress scenario.
7. Data quality and reconciliation
Tie the loan-level tape back to the servicer report and the fund's statements. If the numbers don't reconcile, every downstream analysis inherits the error.
Where Sabiá Alpha fits
Most of this checklist is data work before it is judgment. Sabiá extracts and structures the tape, reconciles it against the servicer report and fund statements, flags anomalies, and traces each figure to its source — then your team makes the call. AI compresses the hours; the decision stays human.