Grupo BTG Pactual is weighing separating its hedge fund unit to ring fence it from the banking operations, two people familiar with the matter said, as the Brazilian investment bank fights to preserve funds following the arrest of its billionaire founder.

One option being considered is to move the hedge fund assets into a separate investment firm in which the unit’s partners take an equity stake, according to two people familiar with the discussions. Another person with knowledge of the talks said that managers won’t get a stake. Spokesmen for BTG declined to comment.

BTG has been seeking to sell assets since the arrest in late November of Andre Esteves, its chief executive officer and chairman at the time. He is accused of trying to obstruct a corruption investigation involving oil company Petroleo Brasileiro SA. Esteves, who was released from jail last month and is now under house arrest in Sao Paulo, has denied any wrongdoing through his lawyers.

BTG is seeking to retain its Brazilian operations and is focusing on the disposal of stakes in international units or entire overseas businesses to shore up capital, one of the people said.

Led by former UBS Group AG fixed-income trader Antoine Estier, the hedge fund unit bets across asset classes and managed more than $4 billion in its flagship BTG Pactual Global Emerging Markets and Macro fund at the end of October, according to two separate investor updates seen by Bloomberg. 

The fund returned almost 9 percent in the 11 months through November, the updates show. That beat the near-zero return in the same period for the HFRI Macro (Total) Index, which measures returns for peers that bet on long-running economic trends.

BTG has received a non-binding bid for its Swiss private bank BSI SA from Banca dello Stato del Cantone Ticino and two undisclosed partners, BancaStato said in a statement on Thursday. The Brazilian bank is close to finding an exclusive buyer for BSI, a separate person familiar with the plan said. Unidentified bidders have offered shares to BTG Pactual as part of a payment for the purchase of BSI, the person said, asking not to be identified as the matter is private. A BTG spokesman declined to comment.

The Brazilian bank acquired Lugano, Switzerland-based BSI from Italy’s Assicurazioni Generali SpA for 1.25 billion Swiss francs ($1.25 billion) in September.

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