Type Sociedade Anônima Revenue BR$ 6.7 billion (2014) Number of employees 3,200 | Founded 1983 | |
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Traded as BM&F Bovespa: BBTG11Euronext: BTGP Number of locations 30, such as: Sao Paulo, Rio de Janeiro, Brasilia, Belo Horizonte, Porto Alegre, Recife, Salvador, Ribeirao Preto, Curitiba, Cuiaba, Sorriso, Varginha, Santiago, Medellin, Bogota, Mexico City, Buenos Aires, Lima, San Jose, Naples, New York, Stamford, Houston, Johannesburg, Geneva, Kiev, London, Nairobi, Shanghai, Hong Kong Services Investment bankingAsset managementWealth management Stock price BPAC5 (BVMF) R$ 4.60 +1.23 (+36.55%)24 Feb, 5:56 PM GMT-3 - Disclaimer | ||
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BTG Pactual is a Brazilian financial company that operates in the markets of Investment Banking, Wealth Management and Asset Management. It offers advisory services in mergers and acquisitions, wealth planning, loans and financings, as well as investment solutions and market analyses.
Contents
- Li o de vida andr esteves btg pactual 03
- Li o de vida andr esteves btg pactual 02
- Investment Banking
- Asset management
- Wealth management
- Main financial indicators
- Structure
- History
- Insider Trading
- Pactual sale to UBS and resale to BTG
- BTG Pactual Purchase of BSI
- Fraudulent misrepresentation claim by BGT Pactual Asia Ltd employee
- Conflict with Brazilian Regulators and Central Bank
- Involvement in Sete
- References
With headquarters in São Paulo, the clients of the Bank – which started out as a brokerage firm in 1983 in Rio de Janeiro – are companies, retail and institutional investors, as well as municipal, state and federal governments. With assets of R$218,3 bn and shares traded on the BM&F Bovespa and NYSE Euronext, BTG Pactual has offices in the main Latin American cities and in the world's leading financial centers..
Since December 3, 2015, BTG Pactual is controlled by the Top Seven Partners, composed of members Marcelo Kalim, Roberto Sallouti, Persio Arida, Antonio Carlos Canto Porto Filho, James Marcos de Oliveira, Renato Monteiro dos Santos and Guilherme da Costa Paes. The group has acted as bank executives during André dos Santos Esteves' management, a former BTG Pactual controller and CEO.
The change came after the arrest of Esteves, who is still a shareholder of the bank, but without voting power. Esteves was arrested on November 25 in the Lava-jato operation, promoted by the Brazilian Federal Police. Since then, Roberto Sallouti and Marcelo Kalim are co-CEOs of the bank. Persio Arida is chairman of the Board of Directors.
Since then, the executives promoted different measures to disassociate the image of BTG Pactual of its former CEO, especially after the reaction of the capital market (the bank's units on BM&FBOVESPA depreciated more than 50% within two weeks after Esteves arrest and continue to depreciate) and the lowering of the rating agencies Moody's and Fitch.
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Investment Banking
As a consultant or financier, BTG Pactual helps companies, other financial institutions and governments to obtain funding via the issuance of securities, and structured and guaranteed loans. It also provides services in M&A, IPOs, FX operations, as well as trading in derivatives and commodities.
Asset management
With a focus on capital preservation for institutional clients, it offers consultancy and investment solutions in fixed income, money markets, public and private equity, as well as stock, receivables-backed, real estate, hedge and private equity funds.
Wealth management
BTG Pactual area responsible for managing customized investment portfolios for High Net Worth (HNW) individuals. It also offers financial advisory services to families that need to protect and expand their wealth, as well as succession and real estate planning.
Main financial indicators
BTG Pactual, considered one of the main Investment Banks in Latin America, has the following financial results (2014):
Structure
BTG Pactual is formed by two joint controlling subgroups: Banco BTG Pactual and BTG Pactual Participations. The latter is the managing partner and controller of BTG Investments. Banco BTG Pactual is the main operating company of the group. On 15 September 2015, BTG Pactual acquired Banca della Svizzera Italiana (BSI) / Banco da Suíça Italiana). Founded in 1873 in the city of Lugano, BSI is a financial institution specialized in wealth management for private and corporate clients.
History
BTG Pactual began in 1983, in the city of Rio de Janeiro, with the foundation of the brokerage firm Pactual DTVM. Since then, the company has achieved the following milestones:
Insider Trading
In November 2007, André Esteves' insider trading "force[d] the bank to amend its prospectus, give investors the option of reconsidering bids for BTG shares, and put a cloud over one of this year's highest profile bank deals." In "a statement, BTG Pactual said Esteves believed the allegations had no merit and was determined to appeal the decision." However, the CEO of BTG Pactual André Esteves, did not file an appeal, citing cost and a loss of time as his reasons.
In 2013, Charles Rosier, a partner of BTG Pactual, was convicted in the largest insider trading case in the history of France. While at UBS, at the end of March and early April 2008, he and his cousin Joseph Raad used inside information to purchase shares and options in Geodis just before the announcement of a takeover bid. Of significance, Rosier worked at UBS when he participated in the insider trades when André Esteves, now CEO and partner and director of BTG Pactual, was still employed by UBS as head of fixed income in charge of $1.7 trillion USD. Esteves had also committed inside trades while at UBS only a few months earlier in November 2007. Also of significance, Huw Jenkins, partner and director and chairman of BTG Pactual and formerly CEO of UBS Investment Bank, was a consultant to UBS at the same time.
Pactual sale to UBS and resale to BTG
Arthur Rutishauser in Sonntagszeitung argued that the way 27% of BTG was acquired is an example of an insider case: André Esteves sold the bank in 2006 for 3.1 billion Swiss Francs to UBS, where at that time Huw Jenkins was a key decision maker, and heavily involved in that transaction. Esteves later repurchased Pactual back in 2009 for 2.5 billion Swiss Francs after being allowed to leave UBS to set up BTG. Huw Jenkins was ejected from UBS in 2007 and disappeared from view, to then resurface as a senior partner and Board member at BTG Pactual in 2010.
BTG Pactual Purchase of BSI
On 14 July 2014, BTG Pactual purchased Banca della Svizzera Italiana (BSI), with the purchase being subject to the approval by the Swiss Financial Market Supervisory Authority (FINMA). The current CEO of FINMA is Mark Branson who was previously the CEO of UBS Securities Japan Ltd. Of significance, Branson reported directly to Huw Jenkins, the CEO of UBS Investment Bank and who is now a partner and director of BTG Pactual. Branson also worked alongside André Esteves, now CEO of BTG Pactual while both worked at UBS in its management committee in November 2007 during which time Andre Esteves committed insider trades. Under Mark Branson’s leadership, FINMA is in the process to now decide whether to approve BTG Pactual’s purchase of BSI, despite BTG Pactual being owned and operated by his former boss and colleague Huw Jenkins and André Esteves, although it clearly does not implicate any illegal activity whatsoever.
Fraudulent misrepresentation claim by BGT Pactual Asia Ltd employee
An ex-employee of Hong Kong subsidiary BGT Pactual Asia Ltd, Zeljko Ivic, filed a claim in late 2013 alleging Banco BTG Pactual SA board member Huw Jenkins and CEO André Esteves made fraudulent misrepresentations to Zeljko Ivic to induce him to sign agreements with Banco BTG Pactual SA. Ivic claimed he had played a key role in Banco BTG Pactual SA's IPO, raising funds from nine entities, including the China Investment Corporation, GIC Private Limited, as well as the Agnelli and Rothschild families, for which services Jenkins had promised him a partnership and shares. Ivic valued his claim at some US$20 million. He started proceedings after being dismissed in October 2013. Jenkins was reported to have been served a writ in the case during a Hong Kong visit.
Conflict with Brazilian Regulators and Central Bank
Bloomberg L.P. reported that “In three separate cases since 1999, Brazil’s central bank and securities commission alleged Pactual had illegally transferred profits to foreign funds to disguise gains and avoid taxes.” In the last case, Pactual was ordered to pay 4 million reais, in addition to the fines charged to the bank partners themselves.
Involvement in Sete
On 19 June 2015, Marcelo Odebrecht, the CEO of Brazil’s largest construction company was arrested by Brazilian Federal Police. Odebrecht was arrested on allegations of fraud, corruption, money laundering and organized crime relating to contracts worth billions of dollars with the rigs company Sete and the state oil company Petrobras. While in detention, Odebrecht attempted to pass a handwritten note to his lawyers that included and mentioned André Esteves, thus potentially implicating BTG Pactual and Andre Esteves in Lava Jato (Carwash). One of Sete’s largest shareholders is BTG Pactual headed by CEO André Esteves. In the handwritten note, Odebrecht requested his lawyers to “destroy rigs’ email.” On 25 November 2015, Esteves was arrested as part of a criminal investigation into Petrobras after he was investigated for his bank's dealings with the oil company.