Biggest Brazil Fund Manager Seeks Partners for $380 Billion Goal

(Bloomberg) -- Brazil’s biggest fund manager is looking for partners to expand its alternative-investment business and reach its goal of 2 trillion reais ($380 billion) of assets under management.

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The growth strategy is something of a reversal for BB Asset Management, a unit of government-controlled Banco do Brasil SA. Former Brazil President Jair Bolsonaro put BB Asset up for sale, but didn’t finish the process before Luiz Inacio Lula da Silva took his job last year and scotched the idea.

“There is no plan to sell BB Asset, on the contrary: We want to strengthen our pillars through strategic partnerships with fund-management firms with the best skills and leaders in their segments,” BB Asset Chief Executive Officer Denisio Liberato said in an interview in Sao Paulo.

With 1.6 trillion reais under management in more than 1,200 investment vehicles, BB Asset is expanding — including through joint ventures — in a strategy designed by its CEO, the first Black man to lead the firm. It has clients throughout Brazil, including individuals, companies and municipalities, and has been trying to speed up its expansion and highlight more alternative funds since Liberato took over last July.

The firm has already teamed up with Iguatemi SA, a shopping center operator, to launch its first real estate fund investing in brick-and-mortar shopping outlets. BB Asset also created a joint venture for ESG businesses with Rio de Janeiro-based asset manager JGP Global Gestão de Recursos Ltda.

Liberato said his company is in talks with other funds for new partnerships, and looking at opportunities to acquire stakes in other firms, without providing names.

Total assets under management in Brazil’s fund industry surged to 6.13 trillion reais in April, an increase of 12% from a year earlier, according to data compiled by capital-markets association Anbima.

Banco do Brasil CEO Tarciana Medeiros included BB Asset in her diversity push, and chose as its chief Liberato, who was then serving as chief investment officer at Previ, the pension fund for Banco do Brasil workers.

‘Humble Family’

Born in Minas Gerais, Liberato said he came from a “humble family” and was able to attend a better, private high school because of a football scholarship. The decision to pursue economics was a matter of “pragmatism,” he said: The college he attended was free and close to his house, and the degree had fewer candidates vying for the available positions.

Liberato started his career at Banco do Brasil in April 2002, but left about 11 years later for a stint at Brazil’s Ministry of Finance. He rejoined Banco do Brasil in 2015 and about five years later joined Previ, then came back to the bank’s asset manager in July 2023.

When he joined BB Asset, Liberato decided the firm should prioritize helping Brazil comply with its green-financing agenda. In January, he signed the partnership with JGP to create an asset-management firm “with potential to lead the Global South when it comes to sustainable finances,” Liberato said.

Banco do Brasil is the leading lender for agribusinesses in Brazil, with capacity to generate a lot of green credit assets, while JGP has the technical expertise to help build ESG credit funds, Liberato said. The first vehicle, called Equilibrio, is a structured fund that raised 600 million reais in just one month.

JGP owns the majority of the ESG joint venture, and the goal is to reach 20 billion reais under management through 2028.

Banco do Brasil’s revenue from the fund-management business was 2.2 billion reais in the first quarter, a 5.8% increase from the same period in 2023, according to the company’s financial statements. That was a quarter of the bank’s services revenue.

BBIG11, the real estate fund launched in May with Iguatemi as adviser, already raised 1 billion reais, attracting wealthy individuals in search of new investments after exclusive funds dedicated to them lost their tax incentives.

“Those investors will come to us in search of more sophisticated products, and we want to have alternatives to provide,” Liberato said.

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