April 20 (Bloomberg) -- Andre Esteves, who agreed to buy back the Brazilian operations of UBS AG, the largest Swiss bank, less than three years after selling the unit, said he is looking at more acquisitions to expand globally.

Esteve’s BTG Investments is paying $2.5 billion for UBS Pactual as the Swiss bank aims to reduce risk and free up capital after posting a 20.9 billion-franc ($17.9 billion) loss in 2008 -- the largest-ever by a Swiss company.

“We want to consolidate Pactual as a leading investment bank in Brazil,” Esteves, 40, said in a phone interview from Sao Paulo. There’s a plan for “ambitious international expansion.”

BTG, which employs about 100 at offices in Sao Paulo, Rio de Janeiro, London, New York and Hong Kong, is “open” for more acquisitions to expand abroad, Esteves said. The sale of Pactual to BTG is part of a plan by UBS Chief Executive Officer Oswald Gruebel, who was brought out of retirement in February, to help restore profitability. UBS had the biggest credit-related writedowns of any European bank.

“This is perfect timing. The price is interesting and it’s the best moment to create a new financial institution,” Esteves said. “While competitors are looking to the past, you have the chance to create a company looking into the future.”

With the UBS’s Pactual acquisition, Esteves boosts BTG’s asset under management to about $27 billion, from $1.5 billion. The purchase includes cash and an assumption of liabilities, Esteves said. A year ago the price for Pactual could have been double, he said, adding that negotiations with UBS lasted for two weeks.

Private Equity

Economists are forecasting that Latin America’s biggest economy will have its worst contraction in 19 years in 2009, as companies curtail output and fire workers. Economists covering Brazil say the economy will probably shrink 0.49 percent this year, down from a previous forecast of a 0.3 percent contraction, according to a central bank survey of about 100 economists published today.

One of the promising areas for BTG Pactual is to buy stakes in companies at a time when the capital markets are not so heated, Esteves said.

Buying into client companies in the current environment “is a good way of supporting your clients,” Esteves said. “You change the kind of transaction but you are still pursuing the same theme, that is to supply capital for companies to grow.”

Esteves became Brazil’s youngest self-made billionaire when he sold Pactual to UBS in 2006. He obtained a $500 million retention package for about 80 UBS and Pactual employees, including Pactual’s 33 partners, payable from the fifth anniversary of the closing of the transaction.

Ambitious Route

After running UBS’s Latin American operations, Esteves was promoted in August 2007 to head the investment bank’s fixed- income business. He left that role after less than 10 months and departed from UBS in June.

A mathematician, Esteves started his career as a computer technician at Pactual and later joined with three partners to engineer a boardroom maneuver that toppled the bank’s founder, Luiz Cezar Fernandes.

Esteves founded BTG Investments last year, together with Persio Arida, Brazil’s former central bank president, and a group of former senior executives at UBS and Pactual.

Last month BTG bought London-based asset management firm Lentikia Capital LP and in October bought Lehman Brothers Holdings Inc.’s Brazilian assets. The Pactual deal has yet to be approved by Brazil’s central bank.

To contact the reporters on this story: Telma Marotto in Sao Paulo at tmarotto1@bloomberg.net

Last Updated: April 20, 2009 17:31 EDT