The Company stands out in the financial advisory of mergers and acquisitions in Brazil. The Investment Banking area provides a wide range of financial advisory services, involving sophisticated and structured solutions to a diversified group of clients.
Main products and services in the Investment Banking area:
- Mergers and Aquisitions
- Capital Markets
- Board Services
- Shareholder´s Advisory
- Special Situations & Reestructuring
- Pre IPO Advisory
The focus of the Investment Banking area is to provide financial advice in solving the most complex and strategic issues for its clients’ businesses, through advising the main decision makers, senior management, boards, committees and shareholders, in transactions that are typically highly relevant.
In order to build and maintain long-term relationships with its clients, the Company seeks to align itself with their interests to position itself as their trusted advisor in the various stages of their business cycle, in addition to emphasizing the involvement of its team. with clients during all phases of transaction analysis and execution.
From January 2010 to December 31, 2021, Investment Banking has advised 174 transactions with a total volume of approximately R$372 billion. The Investment Banking area has a consolidated leadership position in mergers and acquisitions. According to Thomson, Bloomberg, Dealogic, Merger Market, the Investment Banking area was the leader in mergers and acquisitions in terms of total value transacted in 2019. In 2020, the Company remained at 1st in the Bloomberg ranking, it was at 2nd in the Thomson ranking, and at 4th according to Dealogic and Mergermarket by transaction volume. In 2021, the Company ranked 2nd on Bloomberg and 5th on Thomson.
This leadership position and confidence built in its mergers and acquisitions business positions the Investment Banking area to support its clients in times of greater financial challenge, helping them in situations of renegotiating their debts with banks and other holders of their instruments. financial institutions, reformulating the capital structure of its clients and negotiating the approval of judicial recovery plans within the scope of recoveries (judicial or extrajudicial).
Finally, the Investment Banking area has a strong relationship with clients from different sectors of the economy, having, throughout its history, acted in financial transactions in a very dispersed way and without large sectorial concentrations, with only four sectors having concentrations greater than 10 % of total transactions in 2021 (Retail, Oil & Gas, Financial Services and Infrastructure).
The Company’s Capital Markets area operates in the origination, structuring and distribution of fixed income securities and various debt instruments for Brazilian companies, including convertible debt. In serving its clients, the Capital Markets area employs an approach focused on the co-investment of operations, so that we retain part of the structured debt on our balance sheet in order to guarantee the credibility of the issuance and promote the liquidity of the securities in the secondary market.
The Company believes that its origination, structuring and distribution capacity is linked to its network of qualified and professional investors, which mainly includes High Net Worth Individual, family offices and institutional clients, thus having a fundamental role and unique exposure in the disintermediation movement. the Brazilian financial market, the company originates and distributes:
- Mortgage-Backed Security (“MBS”)
- Asset-backed Security (“ABS”)
- Real State Investment Trust (“REITs”)
- Invesment Funds in Agro-Indrustrial Production Chains (“FIAGRO”)
- Creditory Notes
- Credit Notes
The Company’s Treasury Sales & Structuring area carries out the prospection, structuring and execution of risk management operations for its corporate and institutional clients in different interest, currency and commodity markets, as well as providing exchange closing services and provision of guarantee and the sale of the group’s fundraising products.It is worth emphasizing that the Company does not have a proprietary trading desk, reinforcing its conservative position and focusing solely on offering differentiated financial solutions to its customers.
Differentials in the Treasury Sales & Structuring area:
- Team with strong experience in structuring and risk management in fixed income, foreign exchange and derivatives.
- Market intelligence with local and international access.
- Agility in structuring financial solutions with a market view and competitive prices.
- Trading activities always focused on customer service, without proprietary positions.
The Treasury Sales & Structuring area offers the following products:
- Multi-product platform in different FX, interest, commodities and fixed income markets.
- Derivative products: Futures, swaps, forwards and options.
- Exchange: spot operations and future settlement of currencies.
- Asset and Liability Management
- Fixed income: funding products (CDBs, CDIs, Letras Financeiras, LCIs) and operations in the secondary market for government bonds, debentures and securitizations (FIDCs, CRIs, etc.).
- Bank guarantees.
The Investments area manages and invests proprietary capital of the Company and third parties in illiquid equity funds related to the theses developed by BR Partners Gestão de Recursos Ltda., an asset manager controlled by the Company (“BR Partners Gestora”). The investments made by the Investments area generate recurring revenues from management fees, occasional income from performance fees, which are paid when the funds are disinvested, and capital gain on the proprietary investment.
The Company mainly carries out minority investments in privately-held small and medium-sized companies through privately negotiated operations and structures vehicles dedicated to specific strategies, allowing investors to invest capital exclusively in investment theses that they believe will generate more value. More than 80% of the financial resources in equity investment funds under management were raised with third parties, enabling the Company to offer its customers a differentiated product that is rarely available to Brazilian investors. On the other hand, investors are committed to keep the capital invested in the funds for a period of up to 10 years, allowing the Investments area to develop and consolidate its investment theses.
The area seeks to invest preferably in:
- Sectors with lower relative risk (beta), real assets with growth, companies with a recurring revenue profile that can benefit from the economic recovery;
- Middle market companies, which do not conflict with other services provided by the Company;
- Scalable investment platforms with the possibility of consolidation;
- Minority interests, working in partnership with local entrepreneurs who want to develop their companies in the long term;
- Opportunities with attractive entry prices;
- Non-competitive processes, developed within the extensive relationship network of the company’s partners and executives;
- Third-party and proprietary capital to ensure alignment of interests;
- Vehicles dedicated exclusively to each investment thesis.
BR Partners Gestora structures equity investment funds to invest and develop new business platforms, providing proprietary and third-party capital as new opportunities are identified in the same segment. This platform model makes it possible to build scalable investment theses, starting with less capital commitment and growing the asset base and exposure to the sector as new opportunities are identified and the Company feels comfortable with the business.
Currently, the company offers investors attractive risk-adjusted returns, mainly through an investment portfolio focused on the outlet malls segment, in which the Company is the largest financial investor in the country, owning 4 out of a total of 14 outlet malls.
In addition, in November 2021, the company raised a fund with a relevant minority interest to invest up to R$100 million in PetCamp, the largest pet retail chain in the interior of Brazil, with 32 units. The company follows a model of neighborhood stores, with approximately 350 m², and the business plan includes reaching 200 stores in the next 5 years, which would make it the 3rd largest pet retailer in the country.
The investment approach is based on knowledge of the local market, and takes into account specific aspects of emerging markets such as: lack of liquidity, growth, sector-specific dynamics, financial disintermediation, consolidation, privatizations, risk relative to other assets in the economy (beta ) and increased corporate governance.
Although they are potentially risky and generally illiquid, the activities related to these investment funds, when successful, can yield substantial returns on investors’ capital, generate attractive management and performance fees and capital gains on the proprietary investment.
To reinforce BR Partners’ main pillar, which is to generate value for its clients, as well as to seek new growth verticals and diversify its portfolio of services, in September 2023 the Company announced another line of business: Wealth Management.
The area is specialized in wealth management for high-net-worth families and is focused on preserving or maximizing the generation of its clients’ wealth, with a tailor-made and risk management profile for each type of client.
The Company believes that Wealth Management is highly synergic with Investment Banking activities. Since it was founded in 2009, BR Partners has advised on R$137 billion in asset sales to companies and families. With the new area, the company will seek to manage its clients’ wealth after generating liquidity events. In addition, the area has a team to prospect new clients and boost its organic growth in a market that reached R$460.3 billion in June 2023, according to data published by Anbima. Furthermore, Wealth Management will also be an important pillar for generating new business for the company’s other areas, helping to promote cross-selling at the institution and amplifying the customer journey.
The platform will be fully open, with access to a diverse range of investment products, including an off-shore presence. Clients will also have access to a digital platform to monitor their investments. The team will also provide individualized tax and financial planning advice to each client.