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As Brazil lost its place as the favourite of LatAm investors, one bank was particularly savvy about reading the writing on the wall – and looking to expand throughout the region in order to grow and thrive. For leveraging its strengths and increasing its diversity in the market, BTG Pactual is IFR’s Latin America Equity House of the Year.
Andre Esteves, BTG Pactual’s billionaire founder, knows how to be nimble and opportunistic. He has built the bank carefully, combining a savvy reading of the market with bold strokes of daring to construct a powerhouse that this year topped the Latin America ECM league table with 33 deals from five different nations – worth an 11.7% market share in the region.
As Brazil’s star has slightly faded of late, he has consistently remained open to opportunities elsewhere, including with the February 2012 acquisition of Chilean brokerage firm Celfin Capital for 2.42% of BTG equity and US$245m in cash. That created a company with around US$70bn in assets under management – and gave the Brazilian bank a huge foothold in what international investors currently see as a star of Latin American capital markets.
“This was a very clever move on the part of Esteves,” said an investor in New York. “He was watching Brazil become less popular and knew that diversifying is the number one rule in portfolio management – and in running the kind of bank he wants BTG to be.”
Just seven years ago, Esteves sold Pactual, the investment bank he started, to UBS for US$2.5bn. Three years later he bought it back for US$2.45bn. Another three years down the track, and BTG Pactual was floated with a pre-money valuation of nearly US$13bn.
And as he makes a point of sitting beside the junior bankers at his Sao Paulo headquarters – and calling them his equals – he has engendered a culture of success that has made the bank a force to be reckoned with in the Latin American markets.
In the IFR awards year, BTG Pactual priced 21 deals in Brazil, six in Chile, four in Mexico, one in Peru and one in Colombia.
BTG Pactual was an international bookrunner on Mexican bank Grupo Financiero Banorte’s Ps32bn (US$2.5bn) follow-on offering, which was the largest equity offering out of Mexico in the period. The deal was 3.5 times covered, with over 60% of the book consisting of foreign investors, thanks in large part to the push from New York.
The bank was also on the largest IPO of 2013 and the second biggest out of Brazil ever, the R$11.48bn (US$5.73bn) spin-off of insurance unit BB Seguridade, IFR’s Latin America Equity Issue of the Year.
Although the deal was 100% secondary, it still priced towards the top of the range at R$17 per share, owing to the groundwork done globally by bankers, who met hundreds of investors in what seemed to be an endless round of one-on-ones and conference calls.
“BB Seguridade was a landmark deal for the right reasons: deal size and the company’s business model, along with being backed by a very strong sponsor with a successful track record in Brazilian equity capital markets,” said Fabio Nazari, head of BTG Pactual’s global ECM franchise.
Meanwhile, Fibras – the Mexican version of REITs – produced a rush of issuance in which BTG also played a significant role. It priced FibraShop, a US$379m IPO in July, having previously acted as joint bookrunner for one of the largest Fibras at US$1bn-equivalent, for Macquarie, in December 2012.
BTG was also part of Carlos Slim-controlled financial group Inbursa’s Ps13.1bn follow-on in June, one of Mexico’s largest selldowns ever.
“This year, even more than most, was about timing,” said Enrique Corredor, the bank’s head of Latin America ECM ex-Brazil. “When the spigot opened, you had to get those deals squeezed out. In May the market froze with all the tapering talk – but we still kept going.”
To see the full digital edition of the IFR Americas Review of the Year, please click here.
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