Agreement anticipates format that the investment boutique intends to adopt in future transactions, with a “collaborative model”
By Adriana Cotias — From São Paulo
In its expansion plan via mergers and acquisitions (M&A), wealth management company Brainvest made a slightly different move and acquired a minority stake in Rio de Janeiro-based Köli Capital. After incorporating the consultancy KPC a year ago, with R$4 billion under advice, and advancing into the interior from Enso, from Campinas (SP), with around R$2 billion, the transaction now involves a smaller house, with R$500 million, from Niterói. And it all started with Köli's relationship as a Brainvest client.
The agreement provides for an initial 10% stake in the company, which could double over the years, according to Alexander Gorra, partner at Brainvest responsible for expansion and new business. There was an injection of capital for investments, in an undisclosed amount, but nothing secondary, that would provide an outlet for any of Köli's partners.
This arrangement anticipates a “collaborative” model that Brainvest intends to replicate in new transactions, based on its own governance structure. The manager does not have defined control, and in 2021 it transferred a stake of almost 20% to the American Merchant Investment Management, through the issuance of new shares. The foreign investment group has minority shares in 70 wealth managers, which together have US$180 billion. Brainvest, today with around R$25 billion, was the spearhead for growth outside the USA, in Latin America, and also in Switzerland, the company's origins.
“Looking at the opportunity more broadly across Brazil and Latin America, São Paulo, Rio and countries around, being able to do that in a really smart way, but at the high level of a boutique, is really key and it is part of the DNA that we identified when we partnered with Brainvest”, says Tim Bello, founding partner and Managing Partner at Merchant.
If for many years, in the wealth management sector, operations traditionally aimed at control, and this was the path to the best result, today the minority model is already better understood, evaluating the different layers that benefit all parties and also the customer, continues the executive. “What Brainvest and Köli are showing the market is that it doesn’t have to be all or nothing when it comes to capital transactions.”
To reach an agreement with Brainvest, counting on financial support from Merchant, “the least relevant part was the capital”, says Matheus Bonifácio, executive who co-founded Köli in 2016. With the partnership, the manager now has a structure for offering international assets (“offshore”) and financial planning solutions in Brazil and abroad.
Brainvest was founded in Geneva, Switzerland, in 2003, by former Hedging-Griffo Dany Roizman, who bought the operation in that country when Credit Suisse entered the business in Brazil. Today, the manager also has a presence in Miami, in addition to having bases in Rio and São Paulo.
“The first step, instead of having Brainvest as a partner, was to mandate the offshore company. For two years, it was a four-hand job and we got to know each other”, says Bonifácio. “With the ‘family office solutions’ area, we are able to have all services on a single platform, and with an independent relationship. Before, we had contact with some ‘private banking’ services [in banks] and each one pulled sardines to their side.”