{"id":12239,"date":"2012-05-11T14:25:33","date_gmt":"2012-05-11T12:25:33","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=12239"},"modified":"2012-05-11T16:30:09","modified_gmt":"2012-05-11T14:30:09","slug":"facebook-banks-on-growth-in-brazil","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/internet\/12239\/facebook-banks-on-growth-in-brazil\/","title":{"rendered":"Facebook banks on growth in Brazil"},"content":{"rendered":"

For most people, Facebook<\/a> is a way to connect with friends and family all over the globe. For Brazilian investment bank Ita\u00fa BBA, Facebook could help it forge connections with the elite banks that handle the world’s biggest financial deals.<\/p>\n

Ita\u00fa BBA last week won a coveted role on Facebook Inc’s IPO advisory team, becoming one of 33 banks that will underwrite one of the most eagerly awaited stock market debuts ever.<\/p>\n

The deal gives the S\u00e3o Paulo-based firm more global visibility and reflects increased confidence in Brazil and its capital markets, even as risk-taking wanes in the face of a weak global economic recovery.<\/p>\n

For Facebook, a relationship with Ita\u00fa BBA can do more than line up Latin American buyers for its $10.6 billion initial public offering – the bank can also help spot potential takeover targets in Brazil, which trails only the U.S. in terms of active Facebook users. In recent months, venture capital funds have poured money into a range of Brazilian startups, from travel site ViajaNet to online auto parts retailer Connectparts.<\/p>\n

Ita\u00fa BBA’s parent company, Ita\u00fa Unibanco, is Brazil’s top private sector lender and a leading money manager for the rich in the region.<\/p>\n

“It is a bank that’s modeled on the most traditional houses, that has been able to direct investment towards Brazil’s fastest-growing sectors. They have presented themselves to foreign investors as the benchmark vehicle to bet on Brazil,” said Jos\u00e9 Gonz\u00e1les, managing director at money manager SG Asset Management.<\/p>\n

“Facebook sees itself as a global company. This is the moment for them to build relations in places where they see growth, like Brazil,” said Gonz\u00e1les, a former dealmaker for ING Bank and Japan’s Nomura. “It’s a smart move.”<\/p>\n

Facebook users in Brazil nearly tripled to reach 36 million last year, putting it ahead of Google Inc’s<\/a> Orkut service as the No. 1 social network in the country.<\/p>\n

Beating foreign banks<\/strong><\/p>\n

Unlike their counterparts in other emerging markets, Brazilian banks are besting their foreign rivals at funding deals, forging stronger client ties and setting up distribution networks similar to those of global banks.<\/p>\n

Ita\u00fa BBA is Brazil’s top adviser for mergers and acquisitions and bond deals this year, according to Thomson Reuters data. Goldman Sachs Group, Morgan Stanley & Co, and JPMorgan Chase & Co– which are lead managing Facebook’s IPO — ranked 11th, 14th and 17th in Brazilian M&A this year, respectively.<\/p>\n

As more Brazilian companies go public and tap bond markets, that is contributing to the increased role of Brazil-based banks in global investing, said Kevin Kelley, a partner who heads law firm Gibson, Dunn & Crutcher’s Latin American practice.<\/p>\n

In addition to Facebook, Ita\u00fa BBA was co-manager in the $671 million IPO of buyout giant Carlyle Group LP. Bradesco BBI, the investment-banking unit of Brazil’s No. 2 private sector bank Banco Bradesco, in January was picked as co-manager of a sale of five-year debt by the finance unit of Ford Motor Co.<\/p>\n

Ita\u00fa BBA, BTG Pactualand BR Partners, an investment banking boutique that ranked 5th in Brazil M&A this year, participated in 35 out of the 64 deals run by the 10 largest financial advisors.<\/p>\n

“Leads are conscious of that, and that’s why they are courting Ita\u00fa into this secondary role,” a S\u00e3o Paulo-based investment banker, who declined to be identified, said of Facebook’s decision to hire Ita\u00fa BBA.<\/p>\n

Facebook is paying very low underwriting fees, but banks are keen to participate anyway because of the prestige of being in the hottest Silicon Valley offering since Google Inc.<\/p>\n

Dealmakers expect Brazilian banks to get more involved in global deals to serve the growing investor base in Latin America’s largest economy.<\/p>\n

Private banking accounts in Brazil rose almost 7 percent to 464.3 billion reais ($241 billion) in the 12 months ended in March, according to Anbima, the group that represents the local securities industry. That amount more than doubled over the past five years.<\/p>\n

According to recent Forbes Magazine estimates, the country has been creating 19 new millionaires a day since 2007. “If Brazilians are going to be buying big apartments on Brickell or buying Hermes, why shouldn’t they be buying shares of Facebook or Carlyle?” said Doug Doetsch, head of the Latin American practice at Chicago-based law firm Mayer Brown.<\/p>\n

($1 = 1.93 Brazilian reais)<\/p>\n","protected":false},"excerpt":{"rendered":"

For most people, Facebook is a way to connect with friends and family all over the globe. For Brazilian investment bank Ita\u00fa BBA, Facebook could help it forge connections with the elite banks that handle the world’s biggest financial deals.<\/p>\n","protected":false},"author":7,"featured_media":785,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9882],"tags":[25,2755,45,2754,155,2753],"class_list":["post-12239","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-internet","tag-active","tag-brazil","tag-facebook","tag-invetment","tag-ipo","tag-itau-bba"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/12239","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=12239"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/12239\/revisions"}],"predecessor-version":[{"id":12241,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/12239\/revisions\/12241"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/785"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=12239"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=12239"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=12239"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}