Canaccord Starts Business in New York to Serve Latin AmericansBy
Bank plans to offer equity and fixed-income sales and trading
Former XP partner Alejandro Rebelo heads the initiative
Canaccord Genuity Group Inc., the Toronto-based investment bank, is starting a business in New York offering access to international markets for Latin American institutional clients.
The firm will provide equity and fixed-income sales and trading from Canaccord trading floors in the U.S., Canada, Australia and Asia to funds from the Latin America region, Alejandro Rebelo, who just started at Canaccord as a managing director and is leading the initiative, said in an interview in Sao Paulo. “Latin America fund managers are treated like kings in their own nations, but aren’t big enough to get all the attention needed from large international banks.”
Canaccord is adding new hires now to start serving Brazilian clients, Rebelo said. Brazil’s fund industry is the biggest in Latin America, with 3.6 trillion reais ($1.15 trillion) in assets under management, according to Anbima, the capital-markets association.
The Latin American sales-and-trading operation represents “an additional revenue group under our U.S. securities umbrella,” Mark Whaling, global head of sales and trading for Canaccord Genuity Inc., said in an internal memo. “The team will be largely U.S. equities focused, but also will do business in options and fixed income, which represent about 20 percent of their revenue base."
Since many Brazilian funds have a preference for international bonds from Brazilian companies, such as Petroleo Brasileiro SA and Gerdau SA, Canaccord will start the sales-and-trading business for those assets, said Rebelo, who was previously a partner at XP Investimentos.
“On equity, we can use the desks the bank already has, because Brazilians like mostly to trade global consumer companies,” Rebelo said, citing businesses backed by 3G Capital Inc., founded by Brazilian billionaire Jorge Paulo Lemann, like Kraft Heinz Co. and Anheuser-Busch InBev SA/NV.
Canaccord will also provide research from 130 analysts covering more than 1,000 companies all over the world. “Many commodity companies, including some from Latin America, are traded in Canada, and that also represents an important opportunity for Canaccord," he said.
The bank plans to offer “corporate access” to Latin American clients, in which a fund manager can talk to the chief executive officer or chief financial officer of a corporation he or she wants to understand better, according to Rebelo.
“Big Brazilian banks in the U.S. serve mostly big U.S. funds that invest in Brazil, and not the other way around," Rebelo said, adding that an international bank won’t focus much attention on a $150 million Brazilian fund. “I see a niche for us here.”