UBS’s Esteves Rumored in Pactual Buyout

Andre Esteves, the head of fixed income at UBS and the chairman of its LatAm business, was apparently in talks with Jorge Paulo Lemann, a founder of GP Investments, to buy out Pactual’s investment banking unit, say executives within and outside the Sao Paulo-based firm. Esteves was apparently approached by former Pactual partners at UBS to help them take back the boutique sold to the Swiss bank for $2.5bn in December 2006. Already discontented with being employees of the global bank, a number of partners became incensed when they found out their year-end compensation might be delivered partially in stock – a stark change to the all cash bonus culture of Pactual, says an executive at the shop. In February, local paper Valor reported UBS had rejected a buyout offer from Esteves and Lemann, two of Brazil’s wealthiest businessmen, worth over $1bn each. “Andre Esteves is not in discussions with any party or parties concerning the possible acquisition of all or part of the businesses of UBS Latin America,” says a UBS spokeswoman. “Andre Esteves remains committed to the strategy of UBS Investment Bank and his leadership of the [fixed income, currencies and commodities] business.” The alleged Esteves pitch, which comes just months after the Brazilian executive was elevated to head the bank’s ailing fixed income division, appears to undermine the sense that the merger between Pactual and UBS is running smoothly. The defection of Alexandre Bettamio, former co-head of Brazil investment banking, last week to Merrill is another sign that relations are frayed.