The financial crisis at Grupo Entre , which left a number of clients without receiving payments for sales made by card, now puts at risk the survival of Investment Funds in Credit Rights (FIDCs) that had exposure to Entrepay's receivables.

With the extrajudicial liquidation decreed by the Central Bank (BC) at the end of March, the conglomerate's activities were terminated and the assets of its controllers became unavailable. In addition to the compromised financial situation, the liquidation was justified by non-compliance with regulatory standards.

EntrePay, the conglomerate's main company, processed R$ 12.8 billion in payments in 2024. The group was formed by other financial institutions, such as Acqio Adquirência and Octa Sociedade de Crédito, and had experienced strong growth in recent years, expanding its operations into the media and technology sectors.

Since the Central Bank shut down the group's operations, three FIDCs (Investment Funds in Credit Rights) have already declared portfolio problems due to non-payment of receivables from EntrePay. Together, they have over half a billion reais in net assets, and also include banks and other investment funds among their portfolios.

The largest is Garson FIDC. In early April, the fund published a relevant fact, stating that it had identified receivables linked to EntrePay in its portfolio and that, therefore, it would suspend the valuation of assets related to the institution.

Managed by M8 Partners and administered by Hemera, the fund is also the main fund of Garson Crédito, with R$ 313 million in net assets. As of the end of March, its declared delinquency was R$ 19.5 million, with R$ 11.7 million provisioned.

The fund has 71 unit holders, with investments from 15 FIDCs (Investment Funds in Credit Rights) in the senior tranche, one investment bank, and 39 other investment funds. In the subordinated tranche, the fund had, among its unit holders, three legal entities, one FIDC, and nine other investment funds.

According to a report published on NeoFeed , the fund had already approved, in an Extraordinary General Meeting held in December, the inclusion of a series of new risk factors related to the credits. Among them, the possibility of the credit rights "being blocked or redirected to pay other debts of the Assignor/Endorser or the respective Debtors, including as a result of requests for judicial reorganization, bankruptcy, or extrajudicial reorganization plans."

After the publication, the fund canceled the relevant fact disclosing the exposure to EntrePay and the suspension of asset valuation. Instead, the fund called a new Extraordinary General Meeting (EGM) in which a change to the regulations was approved to allow the concentration of up to 10% of net assets in assignors subject to judicial or extrajudicial reorganization plans.

Also approved at the Extraordinary General Meeting was the hiring of debt collection agents Monnerat and Ouchi, with remuneration for their services now stipulated in the fund's regulations.

In a statement sent to the news outlet, Garson Crédito informed that the FIDC (Investment Fund in Credit Rights) has low exposure to EntrePay, without representing a significant impact on the fund. According to the company, the cancellation of the relevant fact was due to an error by the administrator and that the adoption of the measure was only necessary for another fund. The FIDC in question is Garson Card, which has the same service providers, with the difference that EntrePay was the sole assignor of the credit rights.

With the liquidation of EntrePay, Garson Card announced the suspension of the purchase of new receivables and the valuation of its assets, in addition to closing the fund to redemptions. Among the investors were a commercial bank, a FIDC (Investment Fund in Receivables) and nine other investment funds.

Garson Card had been sending out warning signs in recent months, although it had not made any formal announcement indicating a significant deterioration in its portfolio.

According to documents submitted by the administrator to the Securities and Exchange Commission ( CVM ), between December and March, its net worth shrank from R$ 194.5 million to R$ 126 million, while the portfolio's delinquency rate more than doubled, from R$ 15.2 million to R$ 32.7 million. Despite the payment delays, the fund had been operating without any provision for credit losses.

The case is similar to that of the Redwood CC FIDC fund, which also suspended redemptions after the collapse of EntrePay, but had practically no provisions. The fund is managed by Redwood, a management company from the same group as Planner, which is responsible for its administration, and, on the 7th of this month, suspended redemptions due to the liquidation of EntrePay.

According to the March monthly report, Redwood CC had a loan portfolio of R$16.36 million. Of this amount, R$5.13 million was in default, while it projected only R$7,000 in provisions. As of the end of March, the fund also did not declare having exposure to EntrePay exceeding 10% of its portfolio or to any other company.

In its statement regarding the effects of EntrePay's liquidation, Redwood CC reported that the suspension would initially last until Tuesday, when the fund stated it would issue a new material fact notice reassessing the situation and informing shareholders. However, as of Friday the 17th, no material fact notice has been issued.

Operation halted

According to Redwood CC, the obstacle involves BTG Pactual's role as the clearing bank and the entity responsible for processing EntrePay's payment flow. The fund states that BTG has indicated it is awaiting instructions from the extrajudicial liquidator regarding the continuation of any operations or financial flows related to EntrePay.

According to BTG, the institutions within the EntrePay conglomerate are temporarily unable to operate via the Foreign Exchange Settlement System, meaning the bank will not receive funds in the central accounts previously used for depository banking operations.

"The resumption of procedures will only occur after receiving express instructions from the extrajudicial liquidator," says BTG.

At the end of March, Redwood CC had investments from three other FIDCs in the subordinated class, in addition to one individual investor. In the senior tranche, the fund had one individual investor and another investment fund as investors.

In a statement to NeoFeed , Garson stated that it has "full confidence that the payments due will be honored by the members of the payment arrangement, since the funds are segregated from EntrePay's assets" and that the Garson Card FIDC will be reopened "as soon as the financial flows of the arrangements are restored."

"Furthermore, it is understood to be premature and untimely to disclose additional information about the process, such as financial or regulatory impacts, at this time, since the extrajudicial liquidation of EntrePay is in its initial phase. For this reason, the Central Bank and the Liquidator of EntrePay have not yet issued official statements, nor have they indicated how the payment flow to the assignees will be restored—a position in which the FIDCs find themselves," says Garson.

Contacted for comment, BTG Pactual, Hemera, Redwood, and Planner had not responded by the time this report was published.