Strength in numbers, despite the headwinds
BTG Pactual clinches the award for Wealth Management Bank of the Year in 2022 for its
strong performance despite the sharp deterioration of global capital markets.
The Brazilian bank posted its strongest wealth management performance ever in 2021 and is
set to get close to that performance in 2022, according to Rogerio Pessoa, a partner and the
head of wealth management at BTG Pactual.
In the first half of the year, the wealth management division posted revenues of almost R$1.2
billion ($229 million), compared to R$670 million in the same period of 2021. Wealth under
management grew by R$140 billion in the year to June 2022, reaching R$463 billion. BTG
Pactual says that wealth management operations posted record revenues for 14 consecutive
The challenge now is to maintain that strong performance in the quarters to come. Both in
Brazil, its main market for wealth management, and abroad, inflation, higher interest rates and
political and geo-political uncertainties have made the life of wealth managers significantly
harder than before.
Brazil, for instance, took the lead globally in hiking interest rates to fight inflation, with the
central bank raising the reference Selic rate from 2% in March 2021 to 13.75% by October.
The sharp increase has helped the monetary authorities control inflationary pressures.
But it has also impacted the investment strategies of wealth management clients, who tend to
move away from the stock exchange and other riskier – and more profitable – assets when the
reference rate is high.
“With Selic at 14%, we went back to the times when clients were mostly looking to fixed
income,” Pessoa says. “By the end of 2021, we shortened the duration of fixed income
portfolios, we increased cash a little, and we reduced the equity allocation.”
It has also strengthened the real to an extent that assets in other countries have become less
enticing to Brazilian investors. However, BTG Pactual continues to orient their private banking
clients to avoid keeping all their eggs in the same currency basket.
“We have always told our clients to diversify their investments, no matter the political or
monetary cycles. It is always healthy to have around 25% to 30% of the portfolio invested in
strong currencies,” Pessoa says.
BTG Pactual’s wealth management team is composed of over 300 people, spread across ten
Brazilian cities and with a presence in markets including Chile, Peru and Colombia. Private bankers also get help from BTG Pactual’s teams in New York and London.
Two years ago the bank opened a subsidiary in Lisbon that concentrates on wealth
management and will soon inaugurate its representative office in Madrid. But Miami where
much of the action takes place: the bank this year will open a new wealth management office
for its more than 120 staff in the area.
“Miami is already our private banking hub, and will become ever more so,” Pessoa says.