J.P. Morgan Is Latin America’s Top Corporate Access Provider in 2016
Bank of America Merrill Lynch advances to second place; BTG Pactual tumbles to third.
Brazil is beset with crushing problems these days — political scandals, soaring inflation and the worst recession in decades. It’s also the Latin American economy that most intrigues money managers from around the world.
“Brazil continues to be the largest and most dynamic market in the region in terms of size, issuers and liquidity,” affirms Camila Penna, J.P. Morgan’s São Paulo–based head of Latin America equity sales and corporate access. “Moreover, it has been shaken by a major (ongoing) political transformation that has resulted in many investment opportunities.”
Money managers are eager to seize the moment, but many want to meet with company decision makers before deciding where to allocate their funds. The firm that does the best job of arranging such get-togethers is J.P. Morgan, which tops Institutional Investor’s roster of Latin America’s Top Corporate Access Providers for a second consecutive year. It earns a place in 14 of the 15 industries that produced publishable results, missing out only in Electric & Other Utilities. More significantly, it is deemed the best in more than half the sectors in which it ranks, racking up nine first-place positions — nearly double the number claimed by Bank of America Merrill Lynch. The latter outfit advances one rung to finish in second place overall, with 13 spots.
After sharing the winner’s circle with J.P. Morgan in 2015, BTG Pactual tumbles to tie for third with Credit Suisse, which leaps two levels. These access providers earn a dozen positions each, but neither is a sector champion. In fact, the only other firm to top an industry roster is Itaú BBA, which drops two notches to fifth place.
J.P. Morgan’s Brazil Opportunities Conference, held each December in São Paulo, is its largest event in the region, according to Penna. The three-day gathering draws more than 800 attendees and features over 100 speakers, including C-suite executives, government officials and politicians.
Over the past two years, investors have increasingly sought meetings with leaders and consultants beyond the corporate sphere. “This demand has especially spiked in Brazil and Argentina, where politics and government measures have had such a strong impact on investment opportunities,” observes Penna. In response, J.P. Morgan has begun targeting its conferences to include access to relevant regulators and policymakers who could shed light on possible impacts to corporates coming from macroeconomic development or fiscal measures.
The bank held its annual Brazil Macro and Political Conference in Brasília in February. The two-day event allowed investors to meet with main representatives of the government, as well as politicians, consultants and journalists. Attendance is capped at about 50 money managers to facilitate more intimate discussions, Penna explains.
Brazil’s economy has contracted in each of the past five quarters, and an ongoing political crisis shows no sign of ending. In May, its Senate voted to suspend President Dilma Rousseff for six months pending the outcome of her impeachment trial over allegations that she manipulated the government’s budget numbers prior to her reelection bid in 2014, among other accusations.
That’s a lot for investors to take in. “Questions and concerns are centered on the new government’s ability to build a strong enough political coalition to vote and approve the necessary fiscal reforms — reforms that are key for interest rates to fall, investors’ confidence to improve and the country to resume growth,” says Carlos Eduardo Sequeira, head of BTG Pactual equity research in Rio de Janeiro.
His firm’s largest event was its 17th annual CEO Conference in São Paulo in February. Over 1,000 investors turned out to meet with representatives from 126 companies, with 76 percent of participating corporate officials being senior executives and management.
“Demand for corporate access in Brazil and Argentina has been growing nicely as prospects for both countries’ economies improve,” Sequeira reports.
BTG Pactual also organized nearly 90 nondeal road shows in the past year across Brazil, Chile, Europe and the U.S. for visitors to meet with Latin American executives, typically CEOs and CFOs. Over the past year and a half, the firm organized more than 30 field trips to the region and hosted nearly 200 small group meetings, including breakfast and lunch events, at its offices.
Foreign investors need not travel far. BTG Pactual also hosts corporate access events in London in April and in New York in October.
After Brazil, BofA Merrill typically see the most interest in Mexico, according to Elizabeth Everett Krisberg, head of corporate access in New York. “In 2015 demand for Argentina picked up, due to the presidential elections, and it was the second-most-demanded country last year but has moved back down to historical levels,” she says.
Across Latin America, the bank has seen steady appetite for bespoke trips and nondeal road shows, though interest has skewed toward large and midsize companies with good liquidity rather than smaller-capitalization stocks. “Questions from both investors and corporates are focused on politics, economic recovery and interest rate cuts,” Everett Krisberg adds.
Each year II asks money managers that vote in the broader Latin America Research Team survey to indicate which sell-side firms are the best at providing access to the region’s executives. This year we received responses from more than 465 investors at 280 institutions that collectively manage an estimated $246 billion in Latin American equities.
A total of 21 firms make this year’s team (plus an additional 14 that receive an honorable mention). Those that rank highest are listed in the Leaders table. Data regarding firms not appearing here are available from the Institutional Investor Research Group; for information please contact Esther Weisz at 212-224-3307 or email@example.com.