Esteves Departs UBS to Start Fund

Andre Esteves is leaving UBS following a brief stint running global fixed income to start a new global investment fund worth up to $3bn. The former CEO and chairman of UBS LatAm – who was recently demoted from a global role after the Swiss bank scaled back its risk profile – is taking 12 former Pactual executives with him, following months of speculation of a split. UBS bought Pactual in 2006 amid great fanfare, but its Brazilian staff swiftly became disenchanted with the move as the global bank was dragged down by huge subprime losses. The new fund, which will employ global EM hedge and private equity strategies, will target an initial raise of $2.5bn-$3.0bn, say people familiar with the initiative. Fundraising could begin by year-end. Esteves is joined by 12 UBS Pactual staff, including Roberto Sallouti, an MD and head of fixed income for LatAm, as well as James Oliveira, a senior executive in UBS Pactual’s treasury group, which does prop trading. Most of the departures will be from the prop trading group, whose role was dramatically diminished following a decision at the UBS’s head office to reduce risk and focus purely on client-facing fixed income, say bank officials. Rodrigo Xavier, head of UBS Pactual’s asset management business, will replace Esteves as chairman and CEO of Brazil, while Juerg Haller will become chairman and CEO of UBS LatAm. Esteves is expected to formally announce his new venture by July. Until a month ago he ran the ailing Swiss bank’s global fixed income, currencies and commodities business.