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Arminio Fraga Neto awakens at his home in the hip Leblon beach area of Rio de Janeiro by 6:00 every weekday morning to go surfing — on the Web, that is. Fraga spends the first couple of hours of each day poring through online newspapers, academic papers and market research, as well as answering e-mails from portfolio managers and traders. The 52-year-old Fraga got into the habit of rising early when he lived in Short Hills, New Jersey, in the 1990s and was determined to beat the morning traffic into New York City. At the time, he was a managing director at Soros Fund Management, in charge of the fabled hedge fund firm’s emerging-markets portfolio. Today he is chairman and CIO of Gávea Investimentos, Brazil’s biggest independent investment company, with $5.1 billion in assets under management, including $1.8 billion in hedge funds.

“Every day there’s this massive amount of information from all kinds of sources: news, research, reports,” says Fraga, who is at his desk in Gávea’s modest Leblon offices by 9:00 a.m. and generally doesn’t leave before 8:00 p.m. to drive home for dinner with his wife, Lucyna, and his son, Sylvio. “I go through it all day long, connected. At the end of the day, I barely have the strength to disconnect and fall asleep.”

Few hedge fund managers are better qualified to process massive amounts of information than Fraga, who has taught economics at top universities in Brazil and the U.S. His unique curriculum vitae — he is a former governor of the Banco Central do Brasil and a distinguished scholar with hands-on experience in capital markets and an extensive career on Wall Street — has helped Fraga raise assets for Gávea since he co-founded the firm in 2003 with Luiz Fraga, his cousin, and former central bank colleague Luiz Fernando Figueiredo. Of course, it doesn’t hurt that investment returns have been good: The flagship Gávea Fund had an annualized return of 11.6 percent through July, with annualized volatility of just 8 percent, an impressive performance for a manager making macroeconomic bets on emerging markets.

Bearded, balding and a bit paunchy, the soft-spoken Fraga may seem an unlikely hedge fund honcho. But he is one of the most powerful people in Brazil, described by some as the Alan Greenspan of Latin America. Fraga headed the central bank from 1999 to 2002, a critical time for Brazil, when decisions were made that transformed the country into today’s darling among the emerging markets. Shortly before then-president Fernando Henrique Cardoso chose Fraga for the position, Brazil opted to end its longtime crawling-peg exchange rate regime, which loosely fixed the real to the U.S. dollar and other currencies of major trading partners, and introduced a new way to anchor the currency: inflation targeting. Fraga reinforced the new inflation policy and insisted that the government maintain a tight fiscal stance. At vital moments he raised interest rates aggressively to protect against a run on the real.