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Brazil: BR Partners ramps up its ECM capabilities

Expects to build a strong niche position; Courting international investors

BR Partners plans to add an equity research division to the firm in a bid to become an active participant in the local ECM market in Brazil. The firm is recruiting equity analysts and expects to build an in-house team over the next couple of months, with a medium-term target of coverage of between 80 and 100 Brazilian companies.

Ricardo Lacerda, founding partner and chief executive of BR Partners, expects there to be a role for smaller banks in ECM transactions in the coming years despite the fierce competition for ECM mandates from the large Brazilian banks. Many of the international investment banks also continue to invest in their Brazilian equities capabilities.

Lacerda says that he doesn’t expect the bank to achieve a hit rate comparable to the leading local banks but does foresee it having an important role as a niche player. He argues that the decision to bring research in-house is a display of the firm’s commitment to growing its ECM business.

Local equity

Another Brazilian independent start-up, Plural Capital, is also keen to underwrite local equity deals and in May BR Partners advised it on its acquisition of brokerage firm Geração Futuro.

BR Partners has been engaging with international investors through meetings in London and New York and has been arranging non-deal roadshows for Brazilian corporates. Lacerda says international investors have responded with great interest to the opportunity to hear about new and emerging Brazilian companies that might be candidates for IPOs in the next couple of years.

Lacerda expects BR Partners to be capable of underwriting equity deals by October and is targeting the second quarter of 2013 for the first deal. The bank expects to be able to make specific recruitment announcements in the coming months.

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