BTG Pactual launches $1.7bn infra fund

The Brazilian investment bank, poised to become the largest in Latin America, is seeking to attract investors for a new 10-year, closed-end listed infrastructure vehicle. The fund is open for subscription until July.

BTG Pactual, which is set to become the largest investment bank in Latin America, has launched a new R$3 billion (€1.3 billion; $1.7 billion) private equity-style infrastructure fund focused on the Brazilian market. The launch was revealed in a prospectus issued by Citibank, which is acting as custodian to the fund.

According to the prospectus, the fund will aim to raise up to R$3 billion and will be a listed, 10-year closed-end vehicle with a five-year investment period. The fund, which will charge investors a 2 percent management fee and 20 percent carried interest, will remain open for subscription until 16 July, 2012.

The fund is the second infrastructure-focused vehicle to be raised by BTG Pactual. According to the firm’s website, the firm’s infrastructure team – which is part of an asset management unit that also includes private equity, real estate and hedge funds – is currently “focused on the management and divestment” of the FIP Brasil Energia fund, which focuses on investing in transmission and generation assets.     

In June 2011, BTG Pactual closed its latest private equity fund on $1.5 billion, taking just six months to raise the capital and exceeding its target by 30 percent according to a report by sister publication Private Equity International.

In August 2011, BTG Pactual announced it had entered exclusive negotiations with Chilean brokerage Celfin Capital to create the largest investment bank in Latin America. The completion of the deal is thought to be imminent. 

Brazil is seen as an inceasingly promising market for infrastructure investment ahead of the 2014 soccer World Cup and 2016 Olympic Games, with attractive opportunities envisaged in areas such as ports, energy and transport.  

In the second half of last year, Patria Investimentos, the Brazilian fund manager 40 percent-owned by US alternative assets giant Blackstone Group, announced a final closing of its P2 Brasil Private Infrastructure Fund II on $1.155 billion – beating a $1.0 billion target.