10 de diciembre de 2015 / 13:11 / en 2 años

UPDATE 2-Top BTG Pactual unit holder adds stock despite drop, sources say

(Adds BR Properties stake sale)

By Guillermo Parra-Bernal

SAO PAULO, Dec 10 (Reuters) - Hedge fund manager Emmanuel Hermann, the largest individual unitholder of Grupo BTG Pactual SA, is increasing his stake even as concern that the investment bank could be ensnared in a corruption probe sparked a 57 percent slump in its stock, sources with knowledge of the matter told Reuters.

Hermann, who had headed BTG Pactual’s proprietary equity desk until April 2014, has about doubled his stake to around 2 percent since the Nov. 25 arrest of André Esteves, the bank’s founder and his former boss, according to one of the sources.

The source, who is familiar with Hermann’s thinking, said the hedge fund manager stepped up the purchase of the bank’s units, a blend of voting and non-voting shares in BTG Pactual’s investment banking and private equity divisions, because of his “trust in the quality of the crew” that replaced Esteves at the helm of the bank.

The source, who requested anonymity to speak freely about the issue, said Hermann`s 1 percent holding in BTG Pactual was worth about 300 million reais ($53 million) before Esteves` arrest. The units are held in an investment vehicle called Fúria, which means “anger” in Portuguese.

With the additional purchases and the slump in the unit price, the value of Hermann’s stake is now about 135 million reais.

Units fell 8.1 percent on Thursday to 12.15 reais. The stock has declined in 11 of the past 12 sessions.

A group of seven co-founders took control after Esteves relinquished all his executive duties last week. They are rapidly shedding non-essential assets, curbing new loans and dismantling massive derivatives positions to help BTG Pactual preserve cash and lure clients back.

“The partners have taken the proper steps to put the bank back on its feet,” the source said, citing Hermann as saying. Investors have grown wary that a potential incrimination of BTG Pactual may further hamper its ability to attract new business and maintain relations with existing clients.

The slump in BTG Pactual units drove Fúria’s asset base down to 125 million reais on Friday from almost 400 million reais on Nov. 24, according to a second source.

Apart from the units, Fúria also owns 70 million reais in BTG Pactual local notes and 16 million reais in shares in BR Properties SA, a real estate company in which the bank has a stake of 35 percent.


An unidentified investor raised about 530 million reais from the sale of about 60 million shares in BR Properties, traders said on Thursday. The São Paulo Stock Exchange also did not disclose the buyer or potential buyers.

Shares of BR Properties were sold at 8.27 reais each, slightly down from Wednesday’s close of 8.29 reais.

The same traders said the most likely seller was BTG Pactual, adding that the amount sold represented almost 20 percent of the company’s outstanding shares.

BTG Pactual declined to comment.

Hermann worked for 22 years with Esteves at BTG Pactual and its predecessor, Banco Pactual, until last year, when he left to set up Grupo Leste, a hedge fund with a strong focus on credit, private equity and real estate assets.

At the time, Esteves waived a non-compete clause to free him from BTG Pactual.

Following his departure, Hermann swapped all of his stake in the partnership holding that controls BTG Pactual into units. Fúria and Leste are totally unrelated entities, both sources said.

Officials at Rio de Janeiro-based Leste, which manages about 700 million reais in client money, declined to comment.

$1 = 3.7548 Brazilian reais Additional reporting by Paula Arend Laier in São Paulo; Editing by Lisa Von Ahn

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