BTG Sees Commodities Expanding as Brazil IPOs Dwindle

Grupo BTG Pactual, the Brazilian investment bank expanding into commodities, said the unit is performing “extremely well” amid a drought in the market for initial public offerings.

The business is filling a gap in the market for commodities-trading services in Latin America, Chief Executive Officer Andre Esteves, 45, said today in Rio de Janeiro at an event sponsored by a business-promotion agency for the city.

BTG has provided physical delivery and commodities trading since the middle of last year, with people operating from Singapore to Geneva, Esteves said. Revenue from sales and trading, which includes commodities, rose 30 percent in the first quarter, according to the bank’s earnings statement.

“This is already a global operation that will continue growing,” Esteves said, declining to give growth figures for the business. “We must seek opportunities where they are.”

Commodity gains for the bank come as the IPO market stagnates. Esteves said the nation may finish 2014 without a single IPO.

Brazilian companies are withdrawing plans for IPOs amid sluggish economic growth and rising inflation. No companies have gone public this year in Brazil, compared with 10 IPOs for all of 2013, according to data compiled by Bloomberg. The 10.2 billion-real ($4.59 billion) offering of insurer BB Seguridade Participacoes SA in April was the world’s largest last year.

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