Winner: BTG Pactual
Notching up wins in turbulent markets
In the first eight months of 2021, capital markets were booming around the world and Brazil
was no an exception. But between the end of last year and early 2022, a combination of factors
including high inflation and rising interest rates roiled markets and curtailed dealmaking.
In this difficult operating environment, BTG Pactual was able to keep its investment banking
operations on course, leading the Brazilian market in M&A and equity deals and ranking
second in fixed income. The lender wins the award for Investment Bank of the Year in Brazil in
It has been a challenging period, though. BTG Pactual’s investment banking revenues dropped
5% in the first half of 2022 from a year earlier to reach R$1.98 billion. The drop is hardly
surprising considering the dramatic change in the mood of investors since the second half of
Guilherme Paes, partner and head of investment banking at BTG Pactual, says there were 75
equity deals between January and August last year; but from September to December, there
were just nine. And while IPOs accounted for 45 of the year’s 8 4 deals, none took place in the
final third of the year.
The abrupt change of direction was far from an exclusively Brazilian phenomenon. Globally,
the number of IPOs, excluding SPACs and deals smaller than US$20mm, fell to 487 in the first
nine months of 2022 from 1,589 in the same period of 2021. In the US, the slump was even
more pronounced: from 288 to a mere 17.
But BTG Pactual still managed to participate in a number of follow-on transactions during the
award period. Debt issuance, for its part, suffered less than equity deals, especially in the
domestic market, where many investors migrated chunks of their portfolio from riskier assets
to more conservative fixed income products. Demand for debentures has been particularly
strong in Brazil.
“Companies can now issue debentures with 10, 15 or even 20 years maturity,” Paes says.
“And, after the withdrawal of BNDES from the funding of companies, capital markets have
absorbed it all,” he adds, in reference to the Brazilian development bank, which has switched
its focus away from corporate financing to areas such as infrastructure projects.
Business continues to be good on the M&A advisory side, Paes says, as companies seek out
opportunities to grow their business during the crisis.
“The M&A market has remained strong in 2022 as many companies have a lot of liquidity,”
BTG Pactual played a leading role in M&A deals during the period, including the merger
between Intermédica and Hapvida and the acquisition of Sulamérica by Rede D’Or, both in the
health sector; the sale of Ecoenergia to Equatorial (energy); the privatization of Cedae
(sanitation); and BR Properties’ sale of a portfolio of office towers to Brookfield (commercial
The bank also led the privatization of Eletrobrás via the sale of R$34 billion in new equity
earlier this year.
“The Eletrobrás deal was the largest capital market transaction in the world this year, and we
were glad that we were able to lead the follow-on,” Paes says.
BTG Pactual hopes to keep notching up wins in investment banking amid the more turbulent
markets, thanks to its experienced team and knowledge of the local market.
“We see many opportunities in this kind of environment,” he says. “Some IPOs are ready, we
are just waiting to see what the direction the economy will take.”