Advent Bets on Brazil Bond Trading

Private equity firm Advent International has taken a 30% stake in Brazil’s Cetip for BRL360m ($170.6m) from local financial-market participants. Cetip is Brazil’s main central depository for private fixed-income securities and OTC derivatives, says Advent. As an investment, Cetip provides a good mix of business lines that help offset drops in volumes in any single market, says Advent’s lead partner on the deal. “The company is very diversified and can handle well periods of high and low volatility,” Martin Escobari, MD at Advent, tells LatinFinance. During periods of elevated volatility, derivatives activity picks up while more stable periods allow for debentures issuance and the like, he adds. Cetip also counts on advice from former senior executives of BondDesk, a large fixed income electronic trading platform in the US, and the Chicago Mercantile Exchange. Advent is now Cetip’s leading shareholder, with the rest of the company’s ownership being relatively atomized, says Escobari. Cetip demutualized 2 years ago and considered a number of options including an IPO, but for a number of reasons ended up not following through with that plan. Goldman Sachs advised the PE firm on the deal.