Barclays Plc’s Brazil subsidiary is negotiating with Plural Capital Ltda., the asset manager and financial-advisory firm founded by former Banco BTG Pactual SA partners, to work together on underwriting and selling equity transactions, two people familiar with the talks said.
Under the agreement, Banco Barclays SA would sell Plural’s Brazil deals outside the country, said the people, who asked not to be identified because the matter is private. Plural, based in Sao Paulo, would sell to its Brazil customers equity originated by Barclays.
A surge in deals and growing demand for corporate financing is boosting the investment-banking sector in Brazil, the second-largest developing economy after China. Plural will own a broker-dealer in the country with its planned acquisition of Flow Corretora de Mercadorias Ltda, people familiar with the takeover talks said in September. It will have a banking license when the central bank approves the purchase of Banco Equity, an inactive financial institution owned by Banco Prosper SA.
Plural had also considered opening a broker-dealer in New York to reach U.S. investors, though an agreement with Barclays may make that plan unnecessary.
Flow ranks ninth this year through April 17 by volume traded on the Brazilian stock exchange, BM&FBovespa SA, according to data compiled by Bloomberg. Barclays ranks ninth among global equity underwriters this year. In the U.S., it’s seventh for 2012.
Barclays, Britain’s second-biggest bank by assets, posted a 16 percent drop in profit for 2011 as investment-banking revenue shrank. Net income fell to 3 billion pounds ($4.8 billion) from 3.56 billion pounds a year earlier. Its broker-dealer in Brazil ranks 18th on the Bovespa this year.
Rodolfo Riechert and Andre Schwartz created Plural in 2009 after leaving BTG, the Brazilian investment bank led by billionaire Andre Esteves. Plural’s plan to become an investment bank emerged at the same time a non-competition agreement between BTG and its partners ended in July.
Jorge Felipe “Pipo” Lemann, a partner at Flow, will stay with Plural, according to the people. Both firms are located in the same building in Sao Paulo.
A Plural official denied that talks are under way, according to a press officer who declined to be named because of company policy. Kerrie Cohen, a spokeswoman for Barclays, declined to comment.