BTG Pactual is soon to shift from being a Latin American institution, to a global one in the wealth management business, with the acquisition of Swiss private bank BSI.
Before the purchase, BTG Pactual’s wealth management business had already more than quadrupled since 2008, with most assets under management in Latin America. The Swiss acquisition almost doubles the firm’s holdings in its asset and wealth management division, to more than $200 billion.
“It’s an excellent deal that allows us to navigate these turbulent times in Brazil,” says Rogério Pessoa, BTG’s head of wealth management.
A bigger wealth management base will help BTG’s other units, says Pessoa. BTG assesses its wealth management bankers, in part, on referrals to the merchant and investment bank. “We’ve had a lot of [investment banking] deals where the clients were initially wealth management clients,” he says. “All the investments that the merchant bank has done had wealth management money.”
Meanwhile, BTG has also expanded its commodities division globally as US and European banks have shrunk back over the past two years. The Brazilian bank’s advance fits the geography of the business, says Esteves.
“We are in the most important commodities hub globally. None of the global banks [active in commodities] are based here,” Esteves says. “We always did commodities on a smaller scale in Latin America. We always had the plan of doing it on a bigger scale; now the moment arrived.”
The sales and trading unit’s strong performance in the first nine months of the year was partly thanks to the commodities unit. Esteves appears to have even higher hopes for the commodities business after September’s volatility. He says it has been “the best time I could imagine” to have recently bolstered his commodities sales and trading franchise. LF