Seeking to close an infrastructure investment gap, several countries offer high-yield bonds and government backing to private investors.

Even after several years of record economic growth, underdeveloped infrastructure remains a challenge to Latin American economies in realizing their full potential. As such, Latin American governments and private companies will seek to fund much-needed infrastructure improvements this year in a bid to bolster the region’s physical capabilities.

Several experts observe these improvements will make public and private bond issuances to support these projects a natural move, especially given high commodity prices and a growing middle class in the region.

In Colombia a new public-private partnership law went into effect in February, which should pave the way for privately financed and privately constructed projects to be built with government backing. Government involvement will provide backstop guarantees that will make these bonds attractive investments on international markets, despite moderate yields and cautious investors.

Colombia has “a significant amount of toll road assets and rail assets that are going to come online that are going to be financed, very likely, in both the local markets [and] in the international markets,” said John Haley, a partner at law firm DLA Piper specializing in international mergers and acquisitions. “A lot of international investors don’t have a lot of appetite for construction risk and with a public-private partnership you almost make the project the equivalent of a country risk.” That is not all bad news as Colombia is an investment grade country.

In Brazil BTG Pactual – the investment bank led by billionaire Andre Esteves that arose after BTG took over UBS Pactual in 2009 – has launched two funds aimed at investing in infrastructure projects in the region’s largest economy. Billions have already been spent across the country in preparation for the 2014 World Cup and the 2016 summer Olympics. The latest fund, which is valued at more than R$3 billion (US$1.75 billion), will invest in roads, rail, ports, airports and other projects, according to Bloomberg News.

Region-wide, the Inter-American Development Bank estimates an annual $200 billion gap in infrastructure investments and has started looking to the private sector to fill it. Last year, rating agency Standard & Poor’s rated a record number of project or infrastructure bonds with 25 issues; in the initial months of this year it has already received requests for ratings on 15 similar bonds, says Reuters.

Meanwhile corporations in a number of high-growth industries such as oil, mining and heavy manufacturing are expected to turn to international markets for financing large projects instead of banks.

Expect corporate issuances geared toward investors looking for yields beyond what governments -which, through central banks, are holding interest rates at record lows – are offering.

“What we’re seeing right now is a lot of high yield bonds,” said Santiago Maggi a managing partner and portfolio manager for Latmark Asset Management, LLC, “but those are corporate bonds, and not big companies or companies that are well known. They are taking advantage of people looking desperately for yields,” he added.

Where the opportunities from private sector issuances will present themselves will depend on which countries the issuers mainly operate.

In Mexico, “‘I think there would be more opportunities in the corporate market than the government,” said Santiago Ulloa, managing partner for We Family Offices, investment advisers catering to ultra-high-net-worth Latin Americans. “The sovereign debt has rallied a lot but we see opportunities with companies that, instead of going to banks and asking for loans, are going to the bond market for issues.”

Across the region Ulloa said investing opportunities lay with the growing middle class. “They’re buying goods and services and we want to be playing that for the next 10 years,” he added.

_____

Taken from Latin Business Chronicle: http://www.latinbusinesschronicle.com/app/article.aspx?id=5930

As entrelinhas: Este movimento, mais um de impacto criado pelas empresas X, tem um significado novo na acelerada vida empresarial de Eike Batista. Pela primeira vez fica claro que – após tantas trocas de comando em suas empresas – Eike foi buscar auxílio naquele que é o grande intelecto do mundo de negócios de hoje, André Esteves. Fica a pergunta: arguto como é o dono do BTG Pactual, não terá sido êle quem procurou Eike e ofereceu toda a gama de produtos que pode agregar ao momento crucial que afeta as empresas X? Ambos são “aviões”, como se diz na gíria empresarial. A diferença é que Eike está absolutamente encurralado e Andrés cruzando céu de brigadeiro. Parceria a ser acompanhada…

Linx’s IPO would be the first in the country since furniture maker Unicasa priced a July deal below its expected range. Of the only other two IPOs last year, BTG Pactual managed to price in the middle of the range with its atypical transaction and car rental company Locamerica failed to hit its range.

The Brazilian IT company is targeting a pricing date of February 6 to sell 19.6 million shares (assuming a 15% greenshoe) at between R$23 and $27. At the mid-point of the range the company would raise R$490 million ($240 million) and the sale includes 6 million secondary shares going to a private equity fund with links to Itaú, one of the deal’s managers (the others are BTG Pactual, Credit Suisse and Morgan Stanley).

The deal ticks a number of boxes for investors: the company straddles the IT and retail sectors and therefore is exposed to the consumer story in Brazil, which is appealing. The company also plans to use the proceeds to invest in what it believes are strong growth prospects. The only superficial weakness – especially for international investors – is the small scale of the IPO.

 For the full story visit Euromoney

BTG doesn’t employ many people: its global headcount stands at just 1,539 people. However, the people it does employ are treated very well. Over the first nine months of 2012 average pay per head was $375k – putting BTG at the top of our compensation ranking. Appealingly, BTG also seems to follow a traditional compensation model: 80% of its compensation expenses are allocated to bonuses.

Is this colossal increase in compensation pay justifiable? Yes, in the sense that BTG’s profits increased 176% in the first nine months of the year. Less so, in the sense that BTG’s Value at Risk rose 35% year-on-year in the first nine months. BTG is paying big bonuses, but are they encouraging its staff to take more risk?

Separately, here’s the all-important chart from yesterday’s ONS release on the highest paying professions on an hourly basis in the UK. Bankers, lawyers and accountants are surprisingly absent.

Meanwhile:

It’s no longer a systemic crisis, it’s an economic slowdown says BNP Paribas chief executive. (Financial News) 

At least one ex-Goldman Sachs’ partner’s hedge fund is doing well. (Financial Times) 

High frequency trading firm Tibra Capital is hiring in Europe. (Financial News) 

Mirabaud Asset Management is hiring in London – if it can find the right staff. (Financial News)  

Accounting firms BDO and PKF are merging, which will surely be bad for jobs. (Herald Scotland)  

Morgan Stanley’s M&A bankers are upset about being led by a trader – the bank has been trying to reassure them. (WSJ) 

Macquarie’s made a few redundancies in Canada. (WSJ)

SocGen says accounting rules are to blame for its collapsing profits. (CNBC) 

Goldman’s head of investment banking says the big thing in Europe now is refinancing. (Goldman Sachs)

Commodities trader said to be spend £40k in frenzied effort to impress famous actor. (Daily Mail)  

Gargling sugar water improves self-control. (Science Daily)  

Video of now-redundant Barclays FX strategist going on the rampage in Singapore. (SingaporeSeen)  

The arrival of Yassine Bouhara, hired from Deutsche as UBS’s co-head of equities in May 2010 was coincident with a change of culture at UBS, Adoboli’s lawyers argued in court yesterday. Bouhara hired heavily - often recruiting former colleagues Deutsche, and the influx of new Deutsche bankers allegedly led to higher risk-taking and to a bigger drive for profits.

“Mr Bouhara made it very clear to the junior traders that in the new world if they made loads of money for the book they would make loads of money for themselves,” claimed Adoboli’s lawyer Charles Sherrard.  Ron Greenidge, former head of the ETF desk at UBS and a UBS lifer who’d worked at the bank for 19 years admitted the Deutsche bankers weren’t the same: “The culture that they seemed to add was different,” he conceded.

The implication from Adoboli’s lawyers is that UBS was a stodgy sort of place until the hot shot aggressive risk takers from Deutsche arrived to shake things up. Post the Deutsche Bank influx and under the new Deutsche-like culture, Adoboli’s team claim risk limits were often overlooked and it was all about making money. Maybe this was part of the Deutsche culture? It definitely doesn’t sound that way at Deutsche any more.

Jobs and bonuses at BTG Pactual

If Deutsche Bank isn’t a risk-hungry profit-focused pay-for-performance sort of place nowadays, where is?

Try BTG Pactual. As we noted in April, BTG makes revenues of $1.9m per employee – three times as much as the average investment bank, and has been increasing VaR substantially. While other bank struggle to attain double digit returns on equity, BTG is making around 30%. Back in April, we pointed out that  David Herzberg, BTG’s managing partner and head of international equity trading, was hiring in London (allegedly through Spencer Stuart). Since April, BTG has registered 7 new people with the FSA, including Joakim Larrson, a former hedge fund salesman at Deutsche and Philippe Mathieu, a former derivatives trader at Nomura 

BTG’s second quarter results show that it increased global headcount by 15% year-on-year in the first six months of 2012 and now employs 1,434 people. Over the same period, bonuses increased by 134% and salaries and benefits increased by 33%. While other banks are rushing to incorporate measures of ethical behaviour into bonus calculations, BTG also says its bonuses are still calculated according to a refreshingly simple profit-based formula dependent upon: “a percentage of our adjusted revenue, excluding interest and other revenues and operating expenses.”

However, there are downsides to working at BTG. CEO Andre Esteves has given a long interview to Euromoney in which he says investment bankers in general have become complacent. They want to be paid like entrepreneurs, says Esteves, but they also want 30 days’ holiday a year and to be able to switch jobs every two or three years. But this isn’t how entrepreneurs behave. If you want to make money, you need to be obsessive about where you invest and to, “stay at your company forever,” says Esteves. You must not “even consider changing your job.”

BTG locks in its partners by compelling them to hold all their equity in the firm in a vehicle jointly owned by all the partners. If a partner leaves or is ejected for poor performance, his stock must be sold back to that vehicle at book value. There are no options, there’s no vesting date, and there’s no stock dilution, says Esteves.

The upside, is that if you hang around for a long time as a partner at BTG you can become very rich. The downside is that you’ll take a big financial hit if you’re forced to sell at book value and that you’re expected to stay forever. BTG might be the new risk-hungry bank on the block. It may even pay bonuses which are a straight percentage of profits, but it’s not that simple once reach the senior ranks there.

Revenues were not merely up, they were exponentially up. Sales and trading revenues rose 169% year-on-year in the first quarter. In ‘principal investments’ (AKA prop trading), they were up 303%. Overall, BTG’s revenues rose 96% in Q1. Only investment banking, down 52%, was a disappointment.

However, it’s not the revenue line wherein the true happiness lies. It’s in the headcount and compensation figures. The table below says three important things: BTG has been hiring (including in London - click here for who it likes to hire); it’s average bonus is five time it’s average salary; and pay per head rose 75% year on year.

Fourthly, it says average compensation per head at BTG was $149k in the first quarter. At Goldman Sachs it was $135k.

Headcount and pay BTG Pactual 

(At the risk of besmirching the joy, we’d also like to point out that VaR was up 93% at BTG Pactual in the first quarter and that it’s entirely possible that the increase in pay is due to hiring outside Brazil, where we presume people are paid less.)

Irony because as Itaú Unibanco – a division of which, Itaú BBA, is BTG’s closest investment banking rival – has hit consumer credit headwinds in Brazil, the newly-listed BTG stock was about to hit the ground running.

There are two features of the BTG Pactual IPO that should give investors in this remarkable story confidence that, despite its high launch valuation, its stock shouldn’t underperform the market. One is a short term feature, the other is long-term. But the bank’s management should be applauded for both.

For the rest of this article see Euromoney’s May issue: http://www.euromoney.com

The ultimate goal isn’t to encourage students to become entrepreneurs. Instead, it’s to allow MBA candidates to apply the knowledge they have learned during their first year of study at Harvard. “It’s kind of like entrepreneurship with training wheels,” says Youngme Moon, a Harvard marketing professor and chair of the MBA program. “The idea is you are going to start something up, we are going to give you support and teaching along the way, but you … will experience everything in this process in an accelerated fashion.”

To debunk assumptions the school aims to launch the next Facebook, it instead tells students to save their hottest ideas for after graduation, and use the required course as an incubator for learning and failure.

While students were prohibited from creating businesses that sold weapons, pornography, alcohol or tobacco, or offered financial advice, there were some unique concepts, including an online matchmaking service that allowed people to set up their friends on dates. Yenta launched this week.

Other News:

Credit Suisse’s Q1 profit fell 96 percent on regulation and the economy. [NY Times]

Defunct for a quarter-century, the brokerage brand E.F. Hutton is coming back as a boutique run by former executives. [Businessweek]

A $196 million suburban shopping mall was the first of what is expected to be a series of real estate deals for KKR. [WSJ] 

Brazilian bank BTG Pactual raised $1.93 billion in the country’s largest IPO since 2009. [DealBook]

In response to 2011 losses, Finra will raise user fees by 5 percent to 50 percent. [Investment News]

A Bank of England policymaker urged that banker bonuses be subjected to deferral and claw-back periods of 10 years. [Telegraph]

Occupy Wall Street protesters occupied a recent Wells Fargo shareholder meeting. [Bloomberg]

BTG Pactual and its shareholders raised 3.656 billion reais ($1.96-billion U.S.) in Brazil’s first initial public offering of an investment bank, in a show of confidence in the firm and its billionaire founder, André Esteves.

BTG Pactual and its shareholders sold a total 117 million units, a combination of common and preferred stock of its investment and private equity units, at a price of 31.25 reais each, according to information posted on the securities regulator CVM’s website on Tuesday. That was within the suggested price range of 28.75 reais and 33.75 reais

The amount sold fell short of the 121.5 million units that BTG Pactual and partners had on offer. The deal values the São Paulo-based bank at about 27 billion reais, making it Brazil’s 16th-biggest listed company by market capitalization.

Read more…

California banned affirmative action in 1996 and freshman enrollment of blacks in the UC system fell from 4.2 percent in the 1995-96 school year to 2.8 percent in 2004-05. In recent years, the number of black undergraduates has inched up slightly to 3.7 percent as the system’s universities have employed strategies such as wooing students from low-income homes and those who are the first in their family to go to college. The system has also teamed up with groups like the Urban League and First African Methodist Episcopal Church. Now the UC system is looking to further diversify its graduate student body.

This is where the Haas School of Business at UC Berkeley comes in.

The school has 25 spots reserved for underclassmen at historically black colleges for a special summer program that may help them get into the school’s vaunted MBA program. University officials believe that recruiting students at historically black colleges will help them increase their pool of black applicants without running afoul of the law.

Other News:

The U.S. Commodity Futures Trading Commission is exploring ways to give foreign banks and overseas subsidiaries of U.S. lenders a break from rigid derivative rules, a move that could mitigate one of the biggest concerns confronting global financial institutions. [Financial Times]

Brian Kim, founder and operator of the hedge fund Liquid Capital Management LLC, has been sentenced to five to 15 years in prison following a guilty plea to grand larceny in connection with what investigators allege was a $6 million Ponzi scheme. [Bloomberg]

E.F. Hutton will speak again. A group of former executives from the old brokerage firm led by former E.F. Hutton manager Frank Campanale plan to launch the firm under its old name in the coming weeks with the hiring of financial advisors. [WSJ]

Following in the footsteps of other fund administrators, Cayman Islands-based hedge fund administrator Admiral Administration has opened a new office in the Canadian province of Nova Scotia. [Hedgefund.net]

Brazilian banking giant BTG Pactual is preparing to float its shares in Sao Paulo on Thursday and the IPO is shaping up to be one of the South American country’s most successful. [Financial Times]

Morgan Keegan Chief Executive John Carson has been named president of Raymond James’s Financial Board of Directors. [On Wall Street]

The fiscal-first-quarter TD Ameritrade Advisor Index of 502 registered investment advisors reveals that half don’t have written job descriptions for positions in their company, and two-thirds have no defined career paths for new hires, two factors that are important to younger job candidates. [Investment News]

Two financial advisory firms and their top executives will be honored this week for their participation in an industry effort to bring more blacks into the financial advisory business. [Investment News]

Current and former members of Bank of America’s board of directors have agreed to a $20 million settlement in a lawsuit that alleged shareholders were wronged during the bank’s takeover of Merrill Lynch & Co. [Bizjournals.com]

In a sign that construction lending is still alive in some parts of the country, U.S. Bancorp has closed on a $285 million bridge loan to finance a Silicon Valley office complex. [Bizjournals.com]

BTG Pactual has given retail investors five days to pull out of its high-profile listing next week after it emerged that the chief executive of the Brazilian investment bank had been fined by Italian regulators for insider trading.

The initial public offering, which is expected to value the bank at up to $15bn and provide a much-needed boost to Brazil’s equity market, has been lauded as the latest conquest in the rise of Latin America’s largest independent investment bank.

However, the deal received a blow on Monday when it emerged that André Esteves, BTG Pactual’s chief executive, who owns 24 per cent of the bank, had been fined €350,000 by Consob, the Italian financial watchdog, for insider trading.

You may want to try: BTG Pactual, or VTB.

BTG Pactual

We looked at the hiring inclinations of BTG Pactual a few weeks ago. 

It’s worth looking again because the Brazilian bank has just issued its preliminary offering memorandum in advance of its IPO. This reveals hiring in London.

As shown below, BTG added 18 people in London last year. Admittedly, that’s not a lot, but BTG isn’t a big bank: it only employs 1,256 people in total. It also pays them very well. “Our average compensation is the highest of the peer group at US$412.5 thousand per employee compared to the average at the peer group of US$298.3 thousand,” BTG boasts.

In London, David Herzberg is said to be building BTG’s equities business. 

Source: BTG Pactual 

VTB

Also hiring is VTB.

As the graph below, courtesy of  IMAS shows, the Russian bank has quietly been hiring in London since 2008. In 2011, it added…28 people.

Source: IMAS

Last August, VTB hired Riccardo Orcel from Bank of America. Last Saturday, the FT reported that Riccardo’s been poaching former BofA colleagues to join him.

Unfortunately, VTB doesn’t appear to be advertising any vacancies. Nor does BTG. Elsewhere, VTB has been hiring in equities. Ex-RBS staff may want to take a chance and send in their CVs.

Notwithstanding broader market volatility, valuation disputes are threatening to sabotage deals amid, what some argue to be, inflated pricing expectations among Brazilian companies, often at the urgings of bankers seeking mandates.

“By and large, it seems issuers are more realistic [than before] and aren’t going for 2007-type valuations, but, as bankers in Brazil aren’t making any money, they go into pitches very aggressively and throw out these huge numbers to issuers because they need to get deals,” said a senior ECM banker in New York.

Overtaking the UK as the world’s sixth-largest economy in 2011, Brazil has a surface area more than twice as big as Europe and a population over three times that of the UK. Since 1990, poverty levels have halved, with 40m people joining the middle class since 2003. Despite GDP contracting in the third quarter of 2011, the International Monetary Fund continues to make fluctuating predictions of a GDP growth between 3 and 5 per cent for the coming years.

In a market that continues to be this dynamic, it is easy to see why Brazil has warranted such attention from investors looking for returns in a turbulent financial crisis. And the private equity world has not been exempt from scrutiny. Brazilian private equity has enjoyed a significant renaissance since the late 2000s when international investment managers re-entered the market, attracted by the prospect of strong returns and a proven resilience to the global financial crisis of late 2008. The period saw such landmark events as Carlyle’s first Brazil office opening, Blackstone’s acquisition of Patria Investimentos, JPMorgan’s acquisition of Gavea Investimentos, the establishment of BTG Pactual and Vinci Partners, and the launch of a Brazilian team for TPG Capital.

Read more…

Nevertheless, all those who joined BTG Europe Pactual in London since its launch here in 2006 are looking very lucky, or very prescient. Or, both.

In the interest of adulation, we’ve listed all their names below (as per the FSA Register). We’ve also listed when they started with BTG according to the FSA, where they worked before (when it’s available), and what they’re doing there (if they joined recently).

If you want to work at BTG, you may struggle to get in before the IPO. However, it’s worth noting that BTG Pactual Europe does appear to be hiring. Right now, it has 48 registered persons in London, up from 24 at the start of 2011. So far in 2012, it’s registered three new people with the FSA.

BTG’s London office operates mostly as an asset manager and hedge fund, but is also building a European client-facing business.

Many of its most recent hires seem to be affiliated to David Herzberg BTG’s managing partner and head of international equity trading, who joined from JPMorgan in May last year. Herzberg is in charge of a, ‘fund-like structure,’ which began trading BTG’s proprietary capital on August 1st.

Last July, Herzberg said he managed 10 people in London and that he wanted to double this over the next 12 months. Since then, he’s hired two structured product specialists from RBS (Luis Dos Santos, Carlos Cacao) and some hedge fund professionals from GLG and PVA Capital.  He’s also hired Benajmin Clerget from SocGen as head of equity derivatives and Michael Bancroft from Polygon as head of convertibles trading.

Here, based upon extrapolation from the list below, is who BTG likes to recruit. If you think you’re in with a chance, and are senior, you may wish to get in touch with Spencer Stuart, who we understand deal with the BTG’s  London hiring needs.

1. BTG likes to hire from UBS

14 of the 46 people registered with BTG in London are from UBS. If you have UBS on your CV and you know Huw Jenkins, you may be in with a chance.

2. BTG likes to hire from JPMorgan

We suspect that Herzberg is open to hiring from JPM. However, this is not statistically proven: he only appears to have hired 1 JPM banker since he joined.

3. BTG likes to hire from hedge funds

Based on the list below, we suggest the perfect profile for BTG is a former banker (from UBS), who’s spent a few years at a hedge fund.

4.  BTG likes to hire men

48 registered persons. 2 are women.

Here’s who works for BTG Pactual in London:

David Gordon Anderson – joined in March 2010 from UBS, was an emerging markets rates trader, studied at theUniversityofEdinburgh.

Michael James Bancroft – joined July 2011 from ISM Capital. Worked at JPMorgan until 2002.

Nicholas Bodman Morris – started January 2012, previously managed a book of Brazilian clients at UBS Wealth Management.

Stephen Irwin Brown – started 2009, previously with UBS.

Mathew Canning – started October 2011, no previous record with the FSA.

Benjamin Clerget – started January 2012, came from SocGen. Equity derivatives specialist.

Cyril Delaprez – started 2007 – no previous record.

Marat Djaforov – started 2009, previously with UBS.

Mr Luis Rodofo Goncalves P. F. Dos Santos, started July 2011, previously with RBS.

Mr Daniel Dupont Ribeiro, started January 2010, previously with Nomura and Lehman.

Mr Carlos Miguel Eiras Cacao, started August 2011, previously with RBS and UBS.

Mr Lee William Ellis, started November 2007, no previous record.

Mr Antoine Estier, started July 2009, previously at UBS.

Mr Alessio Ali Farhadi, started May 2010, previously with BNP Paribas.

Mr Alexander Rodney Garrard, started July 2009, previously with UBS.

Mr Fabrizio Giurda, started August 2011, previously unregistered with the FSA.

Mr Dirk Heim, started February 2011, previously with Merrill Lynch, Goldman Sachs and Marble Bar Asset Management.

Mr David Eliezer Herzberg, started May 2011, previously with JPMorgan.

Mr Igor Hordiyevych, started July 2010, previously with UBS.

Mr Daniel Edward Isaac Horsley, started November 2011, previously with GLG Partners.

Mr Thomas Michael Hyer, started November 2011, previously with UBS. A Standford Ph.D, he was previously global head of UBS’s unified quant group.

Mr Duncan Michael Ilsley, started March 2010, previously with Itau BBA UK Securities Limited.

Mr Roberto Isolani, started May 2010, previously with UBS.

Mr Evan Scott Jacobs, started September 2011, head of legal, previously counsel with Alliance Bernstein inNew York.

Mr Steven Michael Jacobs, started January 2011. The current Chief Executive Officer of BTG Pactual (CEO). Studied at theUniversityofBrighton. Worked for Ernst & Young as corporate finance advisory and UBS private banking as member of the acquisiton team in 2000. He was appointed  head of global strategy at UBS in 2005.

Mr John Huw Gwili Jenkins, started June 2010, managing partner at BTG Pactual, previously with UBS where he was global head of equities and CEO of the investment bank.

Mr Roderick Adam Knowles, started September 2009, previously with Merrill Lynch.

Mr Christian Bernard Philippe Laloe, started March 2010, previously with Argo Capital Management.

Mr Emiliano Leggieri, started March 2011, previously with FM Capital Partners.

Mr Dinesh Mahajan, started April 2011, previously with Merrill Lynch and then PVE Capital.

Ms Corinne Maillet, started August 2008, previously with Lehman.

Mr Julian Lachlan Maquieira Silverwood-Cope, started February 2011, not previously registered.

Mr Andrew Stewart McDougall, started March 2012, previously with Moore Capital and Credit Suisse.

Mr Jordi Orriols-Gil, started May 2011, previously with Merrill Lynch.

Mr Gautier Andre Pierre Oudine, started August 2011, previously with JPMorgan.

Dr Niccolo Ragnini Kothny, started February 2011, previously with UBS.

Mr Edward Richard Rodrigues, started August 2011, previously with Merrill Lynch.

Mr Marco Ronchi, started October 2006, previously with JPMorgan.

Mr Neil Sadler, started September 2011, previously unregistered with the FSA.

Ms Neila Sula, started April 2010, previously with Endeavour Capital Management.

Mr Simon Paul Taylor, started July 2009, previously with UBS (Dillon Read Capital Management) and Brevan Howard.

Mr Hari Narain Thirumalai, started September 2011, previously with UBS and Bank of America.

Mr Julien Felix Robert Trucy, started September 2011, previously seems to have worked for BNP Paribas in Brazil.

Ms Judith Kathryn Wheelan, started July 2011, actually started in 2010, is a senior relationship manager previously with BarCap.

Mr Scott Wilson, joined November 2011, not previously registered .

How many MBA students go to business school eager to learn operations management? It’s one of those subjects, like leadership, that most students suffer through only to wish once they are out in the world that they had paid more attention. But anyone who makes [operations] their focus will have an enormous advantage when they graduate.

While compensation for operations initially lag banking and consulting, they quickly catch up – and shining on the operations team is a highly visible success, he argues, and with fewer MBAs pursing this field, it affords younger managers “a lot more low-hanging fruit … it will set you up brilliantly for whatever comes next.”

Other News:

Raymond James cut 200 jobs as it completed its purchase of Morgan Keegan. [Bloomberg]

JPMorgan Chase underwrote 7.1 percent of bond sales in Q1, up from 6.5 percent last year. [Bloomberg]

RBC will buy the remaining 50 percent stake in RBC Dexia Investor Services for $1.1 billion. [DealBook]

China is opening its doors to foreign hedge funds. [WSJ]

Experts predict the return of the junk bond. [Financial Times]

Trader Benjamin Fuchs is launching an $800 million fund with backing from his former employer, Nomura. [Reuters]

Macquarie aims to raise a $2 billion North American infrastructure fund. [Dow Jones]

Man Group has started a fund focused on financial companies. [FINalternatives]

NYSE Euronext plans to shave expenses by $250 million by the end of 2014. [WSJ]

BTG Pactual aims to raise $2.2 billion in the first IPO by a Brazilian bank. [Reuters]

Kyobo Life Insurance of South Korea is considering a bid for the Asian insurance business of ING. [WSJ]

BTG Pactual

It’s also why Andre Esteves, chief executive officer of Banco BTG Pactual SA, has the acronym for his soon-to-be-public company, the Sao Paulo-based investment firm which has doubled its capital and tripled assets under management since he bought the business from UBS AG in 2009.

This is a positive move for Brazil’s economy as BTG’s IPO would be the first in the country since July 2011, following a year in which Europe’s debt crisis drained investments from emerging-market economies. A successful pricing may show the way for a pipeline of 40 proposed initial offerings that the Sao Paulo stock exchange estimates at $28 billion, and could offer a template for reducing the government’s role as a top provider of loans to private businesses.

“Esteves doesn’t want to be just an aggressive and young investment banker anymore,” said Ricardo Rocha, a finance professor at the Insper business school in Sao Paulo. “He wants to be a lead actor in the Brazilian economy. He wants to expand in Brazil and Latin America in a world in which there is a lack of capital for the big international banks.”

The state has a hand in much of the lending that takes place in Brazil, the world’s second-largest developing economy after China. Credit extended by banks majority-owned by the government grew to 44 percent of the market in January, from 42 percent a year earlier and 34 percent in August 2008, according to central bank data.

Banco BTG Pactual SA is just one of the many investment firms who have confirmed their attendance to SiLAS 2012: Securitization & Structured Finance in Latin America Summit to hear about the opportunities for deal making and investment in Latin America’s exciting group of economies. You can find out more about the conference and download the full agenda here.

One of the central themes in my latest book, State of the Asset Management Industry – Latin America, is around greater and more direct links between fast-growth emerging economies and regions, especially Asia and Latin America.

More specifically Brazil as a leader in LatAm, and China in Asia, and their growing strategic importance. Or, as FedEx with the help of Sir JJ Institute of Applied Art depicted it, “within walking distance”.

China - Brazil "Within Walking Distance" - FedEx/Sir JJ Institute of Applied Art

Brazil is the hotspot right now, and doesn’t come cheap, but that hasn’t stopped money managers to hit the ground running. As shown below, just for January 2012 the fund industry in Brazil added $11 billion in net cash flows.

A few of the more recent deals and developments:

- CCB in acquisition talks with three banks in Brazil:  As the WSJ reported in January 2012, China Construction Bank is in talks with two to three banks in Brazil with an acquisition that might cost CCB around $600 million (estimates range from $200 million for the smallest bank to around $500-$600 million for the other two, each, according to Dow Jones).

Last August Industrial & Commercial Bank of China (ICBC) bought 80% of Standard Bank Group’s operations in Argentina in a similar $600 million deal (As the WSJ reported, the deal came after the central bank in Brazil said that ICBC submitted an application to begin operations in Brazil).

- BTG Pactual buys rival Celfin Capital in Chile to build out the region: Led by the by now legendary Andre Esteves (who became a billionaire after the UBS Pactual deal) and Persio Arida (former president of the Brazil Central Bank), BTG in February 2012 acquired Celfin Capital in Chile, to move into the lucrative pension fund markets of Chile, Peru and Colombia, and to overall build out their Latin America presence.  The group combined now manages $70 billion in asset management AUM and $30 billion in wealth management assets, for a total of $100 billion. Esteves is talking about the “flow of business between the regional markets growing strongly” and his goal to be the “regional reference point”, most certainly with ambitions to move into other global regions soon.

Andre Esteves - BTG Pactual

- Principal Group takes indirect ownership of Claritas in addition to JV: Principal Financial Group, a leading retirement fund manager in the US, in March 2012 bought a 60% indirect ownership of Claritas Investments as part of some $900 million in capital investments for the year. Claritas manages close to $2 billion in assets in Brazil. and gives Principal a new door into the local market and the region. Since the late 1990s Principal has had a joint venture with Banco do Brasil, distributing pension and VA products through Brasilprev. 

Luis Valdes, President Principal International

Luis Valdes, Principal International President & CEO, emphasized the strategic importance for the firm to enter the Brazilian fund industry.  Conversely, Carlos Ambrósio, managing partner at Claritas, is looking to Principal’s global investment expertise to expand capabilities and distribution.

Larry Zimpleman, Chairman, President & CEO, Principal Group

Principal Chairman & CEO Larry Zimpleman sees Brasilprev and Claritas as targeting different market segments, but “both support our goal to be a pension and long-term investment leader in Brazil.”

- Julius Baer buys stake in Global Portfolio Strategists (GPS) to go after Brazilian and LatAM (U)HNW investors: Swiss private bank Julius Baer in the spring/summer 2011 acquired a 30% stake in Brazilian wealth manager GPS (GPS Planejamento Financeiro and Administração de Recursos) to build out wealth management in Latin America. GPS has a staff of around 85, run by nine partners and three founding partners (José Eduardo Martins, Marco Belda and Roberto Rudge) – the deal gets JB two seats on GPS’ board.

- Credit Suisse & Hedging Griffo: After acquiring investment bank Garantia in 1998, Credit Suisse bought a majority stake in Hedging Griffo in 2006 and then acquired full control in 2011, to build out an onshore asset management and private banking business. HG is run by 70 partners, but most of the attention for the firm has gone to Luis Stuhlberger, the manager of the flagship Verde hedge fund and its offshore version, the Green fund. Stuhlberger implemented Hedging Griffo’s asset management business in 1992. HG’s multi-mercado business contributed strongly to the profitability for CS in 2011, making Brazil a key contributor for the group (and full control a costly undertaking).

Luis Stuhlberger, CIO Hedging Griffo

Thus, away from the strategic long-term opportunities for the region’s institutional and HNW markets, we are now seeing more and more tactical opportunities for asset managers around concrete profitability projections.

And the opportunities go beyond asset management.

- Blackstone buys 40% of Patria to do more deals: The Blackstone Group in the fall of 2010 announced a partnership with Pátria, a private equity pioneer in Brazil, along with the purchase of a 40% stake.  Both firms agreed to cooperate on building their businesses in Brazil and throughout Latin  America.

Stephen Schwarzman, Chairman/CEO Blackstone

Blackstone Chairman and CEO Stephen Schwarzman commented on their long history together. Partnering with Pátria enables Blackstone’s limited partners and advisory clients to benefit from the fast expanding business opportunities in Brazil – and from Pátria’s deep knowledge of the local market.  Focal points are financial advisory services, real estate, private equity, capital management and infrastructure.

Pátria CEO Luiz Otavio Magalhães sees the deal as one of the most significant partnerships in Brazil’s financial industry.

Luiz Otavio Magalhães, CEO Patria

Notably, the trend is not only for international fund managers to go into Brazil, but now also for Brazilian managers to go abroad.

- Brazil’s Safra buying Swiss Sarasin as a hub for Europe, Asia and the Middle East: Emerging market managers are buying stakes or acquiring developed market players. As the private banking industry in Switzerland has hit some bumps in the road and is likely to see consolidation, industry observers assumed that Julius Baer would be the buyer for Sarasin, having made no secret of ambitions to grow via acquisitions. Baer previously bought ING’s Swiss operations, but was not able to add those of ABN Amro. In the case of Sarasin, management resisted the Baer takeover for a variety of personal and business reasons.  Enter Brazil’s Safra Group.

Joseph Safra, Chairman Safra Group

Safra surprised the local industry in Switzerland by agreeing to buy a majority stake for Sarasin from Rabobank for $1.1 billion to expand and link private banking in Europe, the Middle East and Asia. Sao Paulo-based Safra, having moved its headquarters there from Syria in 1952, will bring some Samba to the Bahnhofstrasse. Chairman Joseph Safra stated “the origins of Safra and Sarasin are very similar”, with “philosophies and strategies to private banking that are very much the same.”

The industry should prepare for many more emerging market players to emerge as competitors and acquirers on the world stage of asset management, led by countries like China, Brazil, and the N-11. At a recent industry conference in Sao Paulo I interviewed the leaders of some of the top Brazil asset managers on their strategies.

Some firms make the jump… others are exploring. Investment banking, mutual funds, private banking, hedge funds, private equity, Brazil locally and as a hub for the region and beyond, Brazil is becoming both a tactical and strategic opportunity for market entry, regional expansion and global interconnectivity of an ever more complex asset management industry across clients segments.

Go hard or go home.

BTG Pactual has mandated Goldman Sachs and JPMorgan to help manage its initial public offering as it tries to build one of the biggest independent emerging market investment banks.

The IPO, which is expected to value the Brazilian bank at $13bn to $14bn, follows its merger with Celfín Capital of Chile, which cemented its position as Latin America’s biggest homegrown securities group.

BTG will also manage the IPO, and is expected to file its prospectus with regulators as early as this week, according to people familiar with the matter.

Read more…

This article says that Jesse Bhattal, the former president of Nomura’s wholesale business, who resigned in January, was the one who wanted to make all the big job cuts at Nomura. The bank’s executives in Tokyo didn’t: they “balked” at Jesse’s harshness; Jesse walked.

In Bhattal’s absence, the implication is that the international operations of Nomura are now safe.

“Bhattal wanted big cuts in equities, investment banking and the firm’s US business – as much as $1.6 billion,” alleges Bloomberg. “Executives in Tokyo balked, saying it would be a retreat from the firm’s international ambitions and could erode capital reserves.”

It quotes Takumi Shibata, COO of Nomura holdings, as saying that Nomura isn’t going to retrench and that it still wants to be a, “global, Asia-based investment bank.”

Does this mean the 4,100 staff at Nomura’s new office near St. Paul’s are safe? Maybe not. Nomura is still making $1.2bn of cost cuts.

The good news – if you’re in London – is that Nomura’s staff in peripheral offices seem most at risk.  “We were trying to do too many things, with too many clients, in too many places too much of the time,” Bloomberg quotes William Vereker,  Nomura’s new head of investment banking as saying. “No firm can be all things to all people, especially when you’re building a business.”

Meanwhile:

RBS is cutting 80 jobs in Australia and moving them to Singapore and the UK. (City Am) 

Pieces of JPMorgan are worth one-third more than the current market value (est) based on a sum-of-the-parts analysis. (DealBook) 

French expats are flocking to Hong Kong. (NYTimes)

Being HSBC is about as good as it gets in global banking right now, but that only shows how much the sector is challenged. (Breaking Views)

HSBC could have to pay an additional £3bn in UK tax related to its Asian operations. (Guardian) 

Despite containing a lot of UBS bankers, BTG Pactual has chosen Goldman Sachs and JPMorgan for its IPO. (Bloomberg) 

Henry Kravis and George Roberts each earned $94m last year. (Financial Times) 

The Swiss stock exchange has cut 150 jobs as the strong franc compresses margins. (Reuters)

The CFA Institute says there are a lot of traders who are psychopaths. (CFA Publications)