São Paulo – Brazilian investment bank BGT Pactual, which announced this week a US$ 1.8 billion increase in its capital, through an injection of funds from a investment consortium that includes the government of Abu Dhabi, in the United Arab Emirates, intends to have a "strategic relation" with its new partners, in particular the sovereign funds that are part of the group. In addition to the emirate, the consortium comprises organizations belonging to the governments of Singapore and China.
"[One of our goals is] to establish a strategic relation with these investors, especially the sovereign funds," said the bank’s CEO, André Esteves, in a videoconference held early this week. The reason for that, according to him, is that the funds "are significant investors, with a huge amount of capital available, quality capital with long-term perspectives." The consortium also includes private members.
He stated that the three organizations are among the “leading investors in the world." The Abu Dhabi fund is considered the world’s largest and already has capital invested in Brazil in real estate, banking and the capital market. To the executive, the fact that these organizations are becoming partners "is a landmark."
"This is a huge sign of trust in the future of Brazil and a great window for meeting the demand for long-term capital that our economy has and will continue having for a long time," said Esteves. The deal, according to him, is proof that the funds "share our optimism about the future of Brazil" and that the country and Latin America as a whole are promising when it comes to investment.
The executive stated that the capital injection fits the investment needs that Brazil has and will have in coming years "like a glove," especially in infrastructure. The real estate market is also a field of interest to the consortium members.
"Some of them already have capital invested in Brazilian real estate, and I believe that it should be expanded upon in the future," said Esteves. The Abu Dhabi Investment Authority (Adia), the executive arm of the emirate’s fund, for instance, owns a commercial building in the centre of Rio de Janeiro.
More funds
Another objective of the investment, according to him, is "increasing the capital base" of the bank’s operations. Presently, BTG Pactual has a capital of US$ 2.5 billion. After the new capital injection, which should take place before the end of the month, it should increase to US$ 4.3 billion.
"[This is taking place] at a time in which Brazil is growing and our clients are expanding their activities both domestically and abroad," said Esteves, adding that the existing opportunities were larger than the amount of funds currently available at the bank. "This is a good new development in Brazil," he said.
The bank will be better able to intermediate operations between clients who need money for projects and investors seeking opportunities. To him, the approval of the funds grants greater backing to the institution on the international market. "[The operation] gives rise to a very strong investment capacity for Brazil," he claimed.
Esteves asserted that the operation is unprecedented in the country, and informed that it was chosen instead of an initial public offering (IPO). He claimed, however, that the issuing of bonds on the capital market may take place in the medium term. "[Becoming listed] is the natural future of any company that is growing and wants to perpetuate itself," he said.
*Translated by Gabriel Pomerancblum
