BTG To Form Brazil Infrastructure Fund

SAO PAULO (Reuters) – BTG Pactual, the securities firm led by Andre Esteves, is set to launch a private equity-backed Brazilian infrastructure fund, to take advantage of massive road, port and dam projects, a senior executive said.

“With expectations of growth coming around 5 percent next year, the need for infrastructure investment will be huge,” Eduardo Cutolo, an executive director at Sao Paulo-based BTG Pactual, told reporters late on Thursday.

Private equity investment is expected to grow next year as the country’s growth prospects and declining interest rates draw a new class of risk-hungry investors.

Brazil makes up for about half of Latin America’s gross domestic product and in the past four years represented 45 percent of all private equity investments in the region, according to Emerging Markets Private Equity Association data.

Cutolo did not give details on the terms or size of the fund.

Esteves and his partners sold Rio de Janeiro-based Pactual to UBS AG (UBSN.VX) in 2006 and later became global head of fixed-income, currencies and commodities at the Swiss bank. He formed BTG last year with some of his former partners at Pactual.

Less than four months after quitting his UBS job in 2008, Esteves and his partners in BTG moved to buy Lehman Brothers Inc.’s Brazil unit to expand its trading muscle. BTG bought back Pactual from UBS for about $2.5 billion in a deal concluded in September this year.

The bank aims at taking up the slack left by global investment funds and banks that had to flee emerging markets amid the worst financial crisis in eight decades. Cutolo reiterated that BTG Pactual wants to become the largest emerging markets-based securities firm in a few years. (Reporting by Aluisio Alves; Writing by Guillermo Parra-Bernal; editing by Simon Jessop)