BTG Funds' Net Withdrawals Reach $2 Billion Since Esteves Arrest

  • Amount represents about 60% of net assets from 10 funds
  • BTG Pactual's bonds, shares resume decline in Sao Paulo

Clients continued to pull money from some of Grupo BTG Pactual SA’s fixed-income funds, bringing net withdrawals since billionaire founder Andre Esteves was arrested last month to 60 percent of net assets.

Investors pulled 882 million reais ($234 million) Thursday and Friday from the 10 fixed-income funds listed on BTG’s website, according to the latest available data compiled by Bloomberg. Clients have taken out a net 7.6 billion reais since Esteves was jailed Nov. 25.

The most recent data show withdrawals have picked up pace again, signaling BTG is failing to assure investors that it can survive Esteves’s arrest even after he stepped down from the company’s management and the bank moved to bolster liquidity. BTG’s own securities also declined Monday, with shares slumping 9.5 percent to a new record low and the lender’s $1 billion of bonds due 2020 losing 3.25 cents to 59.9 cents on the dollar.

BTG Pactual’s press office declined to comment on fund withdrawals.

Esteves is accused of trying to interfere with testimony from a former Petroleo Brasileiro SA executive in the so-called Carwash case, the largest-ever corruption probe in Brazil. Esteves, who has denied wrongdoing through his lawyer, stepped down from his posts at the bank on Nov. 29 after his arrest was extended for an indefinite amount of time.

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