Brazilian Farmer Grows Investment Bank

Luiz Cezar Fernandes, co-founder of Banco Pactual and Banco Garantia, says he has clinched a deal to acquire the Brazilian operations of Dresdner Kleinwort from Commerzbank for roughly BRL100m. “This bank here is very clean, which is why I’m buying it,” Fernandes tells LatinFinance, hours before a deal was expected to be signed Wednesday. “The market will need brains, and ones that are not tied up in dealing with skeletons in their closet,” he adds. Fernandes and Eugenio Holanda are paying for the deal in cash, and plan to build a new Brazil-focused investment bank called MTT Group. MTT will have a full banking license and look to take on the Brazil-based investment-banking competition, much of which Fernandes – who runs a sheep farm – describes as being crippled by crisis-related losses. The main challenge, says Fernandes, is knowing what clients need, since global markets have not yet found their footing. Restructuring, M&A, ECM and trading are among the areas the new shop will cover. “Wherever the market needs us, we’ll be there,” says Fernandes. Holanda was formerly with Rio-based real estate securitization shop Tetto Habitacao. Dresdner Kleinwort is the investment banking arm of Dresdner Bank, which was acquired last year by Commerzbank. The latter was expected to confirm the sale of the Brazil unit late Wednesday.