BTG Pactual raises $1.8bn

City A.M. Reporter
BTG PACTUAL, the Brazilian securities firm controlled by billionaire Andre Esteves, raised $1.8bn (£1.1bn) yesterday from a group of international investors to bolster its balance sheet and help fund future expansion.

Sao Paulo-based BTG Pactual sold an 18 per cent stake to some of the biggest sovereign wealth funds in Asia and the Middle East as well as investors in Europe and North America.

The deal is the latest sign of intense investor interest in Brazil, where a boom in consumer spending and credit is lifting tens of millions of people into the middle class. Sovereign wealth funds, eager to find high-yield investments at a time of global economic trouble, have been particularly keen to expand their presence in Latin America’s largest economy.

The capital injection will bolster BTG Pactual’s shareholders equity to $4.3bn, helping the firm gain muscle to grow in coming years and offer lending to clients as part of takeover deals.

The group of investors included affiliates of the Government of Singapore, China and the Abu Dhabi Investment Council. US buyout firm JC Flowers, Exor, an investment holding company controlled by Italy’s Agnelli family, and Inversiones Bahia, an investment vehicle for the Motta family of Panama, were also part of the group.

BTG Pactual had considered an initial public offering to raise the funds, but postponed the plans because of volatility in global markets. Esteves said an IPO was still possible in the medium-term.

Esteves sold the firm to Swiss bank UBS in May 2006 for about $2.5bn. He and some partners bought back Pactual last year for about $2.5bn.