Latin Finance - May 2008 - 68

brazil investment bank hiring declining to speculate on the possibility went up 2.6 times between 2006-2007, that part or all of the team may walk. says Dula. Meanwhile, Credit Suisse and UBS The build-up has been researched have played down the effect of Merrill’s meticulously and over a long time, says poaching. Rodolfo Riechert, head of Dula. The team shares a common vision investment banking for Brazil at UBS – and will bring Merrill to a whole new level in Brazil. She believes the hires will and formerly co-head with Bettamio – points out that UBS has 50 professionals quickly prove their mettle. “These based in Brazil investment banking and bankers have longstanding and trusted has quickly reallocated senior bankers to relationships with companies, CEOs and serve clients. UBS says it adopts an investors,” says Dula, who was institutional rather than star player previously with Grupo Latino de Radio. process which means that clients relate Headhunters estimate that Merrill more to the bank and its process and spent at least $40 million on the hires respond to its platform, distribution and and that by attacking both Credit Suisse execution capabilities over individual and UBS, it has astutely weakened both. relationships. Still, market watchers diverge on how successful the recruitment drive will be. LatAm IPOs Believers think Merrill Brazil 2007 boom goes bust has catapulted itself into a position that lets it 40 challenge the Swiss giants, but they estimate it will take two 35 to three years, much longer 30 than Merrill, which anticipates results starting in the second 25 half of 2008. “In three years 20 from now, the landscape will look different, more diverse. 15 UBS and Credit Suisse will still 10 be leaders but they will be joined by Merrill and perhaps 5 Goldman Sachs,” says a 0 headhunter. 2000 2001 2002 2003 2004 2005 2006 2007 Others pooh-pooh Source: Dealogic Merrill’s bid, questioning the tactic of hiring a team It remains to be seen how this from banks with different cultures, and commitment will be tested by the tens of wondering how such diverse elements billions of dollars written down by the will gel. “[Alexandre] Bettamio and his parent company owing to subprime. And team are used to hogging the limelight. there are rumors that Andre Esteves, the It will be interesting to see if senior bankers such as [Adriano] Borges will be head of fixed income at UBS and the chairman of its LatAm business, was in comfortable reporting to him,” says a talks with Jorge Paulo Lemann, a recruiter. founder of GP Investments, to buy out Furthermore, rumors suggest that existing team members at Merrill, under Pactual’s investment banking unit. Esteves was apparently approached by the seasoned Richard Rainer, head of former Pactual partners at UBS to help Brazilian investment banking, were not them take back the boutique they had consulted in a recruitment process less than a year earlier sold to UBS for driven purely by New York. This sparked $2.5 billion. Already discontented with speculation in the local press that the being employees of the global bank, a old Merrill team is cheesed off and looking for a new home. Dula insists that number of partners became incensed when they found out their year-end staff were consulted in the process, $ billions compensation might be delivered partially in stock – a stark change to the all cash bonus culture of Pactual. UBS rejects the rumor. “Andre Esteves is not in discussions with any party or parties concerning the possible acquisition of all or part of the businesses of UBS Latin America,” says a spokeswoman. “Andre Esteves remains committed to the strategy of UBS Investment Bank.” Meanwhile, Credit Suisse is similarly defiant. “We are not concerned by recent departures. They will not impair the level of high quality services that we’ve always provided our clients,” says José Olympio, MD and head of Brazilian investment banking at Credit Suisse. Locals up the Ante Merrill’s splashy entrance may not be quite the style of the big local banks, but they too have been highly active in seizing the moment. Banco Itaú, Bradesco and Unibanco have always had key advantages over international banks including deep relations across the corporate board and access to strong balance sheets. That is particularly valuable when other routes to funding are wobbly. 2008 YTD Local investment banks are definitely becoming a bigger part of the mix, says FigueraScanlon. They are also proving more nifty at recruiting from smaller banks and boutiques. “More junior guys are starting to bring skills that have not been interesting to banks for years,” FigueraScanlon notes. Itaú has long blazed a trail for locals, hiring aggressively. Itaú poached Deutsche Bank’s office head Alexandre Aoude, João de Biase, head of corporate banking, Fabio Dall Acqua, senior distribution executive, as well as structuring expert Pedro Nunes. Deutsche is reportedly trying to hire to maintain a credible platform in Brazil. Elsewhere, Bradesco BBI became operational as a separate unit in 2007 and the investment banking arm under 68 LATINFINANCE May 2008

Latin Finance - May 2008

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