BTG Pactual has extended its reign in Brazil sales.
For the fourth year in a row, the domestic firm has been voted No. 1 in Institutional Investor’s All-Brazil Sales Team, based on the votes of buy-side money managers with significant holdings in the country.
Their opinions once again buoyed BTG Pactual above a competitive local field that also saw gains. While Bradesco BBI repeated its second-place finish, Santander improved two spots this year to take third. Itau BBA placed fourth, followed by Credit Suisse — the only global firm to crack the top five.
The repeat performance for BTG Pactual shows that the firm has not been resting on its laurels —especially since the pandemic upended the traditional sales model prior to 2020. “In the last two years, since the beginning of the pandemic, we had to adapt and to reinvent our sales approach,” said Thiago Faganello, head of Brazil sales and partner at BTG Pactual. “The face time and relationship meetings were replaced by the online world, [and] that naturally was more distant and harder to monitor.”
The greater the distance, the more difficult it is to understand client concerns and needs, Faganello noted. “How to solve that? Being creative, innovating, and bringing technology to the desk,” he said. “We were forced to do that in 2020 and after a period of time we could improve and adopt the best practices and all the biggest lessons learned.”
But despite all the changes of the last two years, the main pillars are still the same for the sales industry: good relationships, excellent product, top-notch corporate access, and a good reputation. “The main thing that changed was the distribution channel: hybrid mode came to stay, like it or not,” Faganello saidd. “Having an online or presential mode [is key]; the client will choose and we will have to deliver.”
The top concerns today in the market are around a global recession and inflationary issues affecting both the local and global markets. “Those two points were the main ones that drove out liquidity from Brazil and that were responsible for the redemption mode that we are seeing up to now in the asset management industry,” Faganello said. The stock exchange Ibovespa is down to 100,000 levels, the Brazilian real is back to 5.4, and the Sistema Especial de Liquidação e Custodia rate is at 13.25 percent, down from 9.25 percent at the end of 2021.
Combined with the upcoming election period in October, Brazil is experiencing a lot of volatility in the local market. “The good thing is that on the inflationary front, Brazil took advantage and started the rates hike earlier to address inflation, so we could say we are close to peak levels here in Brazil by the time U.S. is still in a hike mode,” Faganello said.
In terms of the elections, the lack of knowledge of the economic plan from the pool’s leading candidates is driving some sort of the uncertainty in the markets. “In times like this, staying close to clients [and] offering the best top-notch corporate access combined with the best research products could be a useful guide that helps them navigate the crisis,” he said.
Faganello credited BTG Pactual’s ability to deliver these thanks to the entrepreneurial mindset and partnership approach of the firm. “We run our daily affairs with a different mindset, an ownership way of thinking, that brings out an excellence mode with an entrepreneur approach,” he said. “When you wake up, think, eat like a partner… new ideas pop up, good results show up, and cross-sell opportunities within the bank appear.”
Collaboration will be more important than ever as 2022 remains a difficult year for capital markets, with lower deal activity in the primary markets. “Consequence will be a more focused approach to the secondary market,” Faganello said. “Sales will be forced to stop selling deals [and] starting to come back to generating alpha trade ideas, good corporate access, and deep knowledge research products.”
Faganello anticipates that 2023 will be a better time to invest in Brazil, with the election season over and inflation homework done, and the firm is already seeing signs of this bounce back. “The best way to measure that is that we are seeing tons of demands from foreigners to visit the region again,” he said. “Valuation levels seem to be so attractive in Brazil that they feel there are some very good opportunities around. So they better to start doing their homework now, so they will be ready to push the button when the time comes.”