BTG Pactual files for Brazil's most-coveted IPO

SAO PAULO, March 1 (Reuters) - BTG Pactual, the investment bank controlled by Brazilian billionaire Andrì Esteves, filed plans to sell shares in what is likely to be the country's most coveted initial public offering this year. The IPO will be the first by an invest-

ment bank based in Brazil, an emerging economic power whose financial industry is booming. While the local IPO market has suffered with recent market turmoil, the BTG Pactual offering will give investors the chance to buy into a fast-growing firm with aspirations of rivaling global giants like Goldman Sachs Group Inc. BTG Pactual, which is based in Sao Paulo, will list common and preferred stock as well as two classes of local depositary receipts. A sale of global depositary units in Amsterdam will take place simultaneously with the Brazil IPO, in which two other shareholders will also sell stock.

Since it was formed in 2009, BTG Pactual has been on a deal-making frenzy in Brazil and abroad as Esteves, a 43-year-old financial wunderkind and the bank's chief executive, tries to make the firm the largest investment bank in emerging markets by the end of the decade.

BTG Pactual and Esteves himself have become symbols of Brazil's growing economic might, competing neck and neck with global investment banks in a region with bustling capital markets and surging demand for wealth management services.

“This deal will pose a litmus test for the Brazilian market; it will give the local market a lot of global visibility,” said Eleazar de Carvalho Filho, managing partner at local investment bank Virtus BR Partners. “I'm sure it will be well-received.” Based on an acquisition it made last month, BTG Pactual is worth about $14.8 billion, which would make it one of Brazil's 20 biggest companies by market capitalization. The 3-year-old bank would be worth more than the combined market value of Brazilian steelmaker Usiminas and Cosan, the world's leading ethanol producer.

The latest valuation for BTG Pactual is also equivalent to 25 percent of that of Goldman Sachs, the world's most profitable securities firm, and 40 percent of Morgan Stanley. BTG Pactual's worth is almost 50 percent more than the $10 billion valuation it got in December 2010, when investors led by buyout firm JC Flowers & Co, the two largest Asian sovereign wealth funds and the largest Middle Eastern sovereign wealth fund, bought an 18.6 percent stake.

Virtus' Carvalho credited BTG'S torrid growth and increasing appeal to the bank's aggressive focus on deal-making and merchant banking as well as Esteves' ability to secure the cheapest and most efficient sources of funding for deals.