Celfin Tie-up to Give BTG Andean Path

BTG Pactual’s proposed merger with Chilean investment bank Celfin is seen giving the Brazilian investment bank a leg-up in establishing a beachhead to expand into the Andean region. The union between the two shops will create Latin America’s largest investment bank, BTG says, and marks its first Latin American expansion outside of Brazil’s borders. The two announced the beginning of merger talks Tuesday, but gave few details about how they are expected to proceed. It is thought however that BTG will most likely buy most or all of Celfin. “It looks like an acquisition given the difference in size between the two,” says a senior official at another Santiago-based bank. Celfin lists AUM at $5.5bn, while BTG has more than $60bn under management. A value for Celfin, a private partnership, is difficult to pin down. Celfin officials have expressed a desire for Brazilian exposure as part of their bid to become a regional investment bank after already expanding into Colombia and Peru. But gaining a foothold in the region’s largest market was clearly difficult. Brazilian rival Itau tapped into Chilean wealth management through a JV with Chilean brokerage Munita, Cruzat & Claro, in which MCC still operates independently. Celfin has cross-selling agreements with Mexico’s GBM, and its Brazilian unit. BTG CEO Andre Esteves told LatinFinance earlier this year that moves into Colombia, Chile and Argentina were likely next steps, and to expect operations there as soon as this year. BTG recently filed initial registration with the CVM, the first step towards an IPO. Founded in 1988, Celfin is owned by 6 partners, including Juan Andres Camus and Jorge Errazuriz.