Brazil’s BTG moves into London equities market

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BTG Pactual is building up an equities business in London as the Brazilian lender makes its latest foray into the domain of global asset managers and investment banks.

The bank, run by Brazilian billionaire André Esteves, has hired a senior investment manager from one of the world’s largest institutional investors to run the business.

William Royan, former head of the relationship investing team at the Ontario Teachers’ Pension Plan, joined BTG last week to set up an equities business within the bank’s international asset management arm.

Huw Jenkins, head of BTG's international arm, confirmed the news. “We are delighted that Bill has joined BTG in London to build an equities business that will target high returns and invest on a global basis," he told the Financial Times.

The move comes on the heels of its latest deal to buy BSI, the Swiss private bank, in a transaction that doubles the Brazilian bank’s assets under management to more than $200bn and opens doors to an expansion in Asia.

The bank, which during Brazil’s economic heyday went by the moniker “Better Than Goldman”, has been on a global hiring and buying spree since its almost $2bn initial public offering in 2012.

“We have benefited from the disarray in the global financial services industry over the past few years to make several important strategic moves,” Mr Jenkins said.

Uninhibited by tighter regulation that has prompted most US and European investment banks to abandon areas such as hedge funds and commodities, BTG has rapidly pushed into them.

“This is like the 80s all over again,” one rival banker at a European lender said. “If someone looks like the Wolf of Wall Street, it’s them.”

The equities business will support the private banking unit, where BTG wants to use Switzerland’s BSI to target entrepreneurial wealth in emerging markets with an offering that includes investment advice as well as investment banking services.

The $1.7bn private bank deal will increase its overall staff from 3,000 to 5,000 once it has received regulatory approval for the takeover from more than a dozen authorities globally.

After the deal has been given the go-ahead, BTG plans to set up a London operation for the private bank as it seeks to tap into the continued influx of international wealth into the UK’s capital. It is also interested in snapping up further wealth management portfolios and teams.

Bought back from UBS by Mr Esteves on the cheap in 2009 after selling it to the Swiss bank three years earlier, BTG has been prolific in its international expansion in recent years.

As well as acquiring BSI, the São Paulo-based bank has this year also taken over a reinsurance business called Ariel Re Holdings and it is planning to increase its fledgling commodities business from 250 people to as many as 400 over the next 12-24 months.

Its commodities business is headquartered in London, from where the Brazilian investment bank has for many years also been active in the hedge fund business.

“The challenge now, and one we believe we’re well-placed to rise to, is to ensure flawless execution of our strategy to maximise the synergies between these businesses,” Mr Jenkins, a former head of UBS’s investment bank, said.

BTG’s share price is up 14 per cent since its listing in spring 2012.

Several of its anchor shareholders, which invested two years before the IPO, have since sold their stakes, people close to the situation said. These include the US private equity group JC Flowers and RIT Capital Partners, Lord Jacob Rothschild’s investment vehicle.

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