2015 All-Latin America Research Team: Brazil, No. 2: David Beker, Felipe Hirai & team
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2015 All-Latin America Research Team: Brazil, No. 2: David Beker, Felipe Hirai & team


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David Beker, Felipe Hirai & teamBank of America Merrill LynchFirst-place appearances: 1

Total appearances: 18

Team debut: 1994A runner-up on this lineup for the past six years, Bank of America Merrill Lynch jumps to second place — the position it most recently held in 2006, before David Beker and Felipe Hirai assumed leadership. Thirty-six-year-old Hirai works out of São Paulo. He has been with the firm since July 2005, joining from asset manager Hedging-Griffo, where he worked as a metals and mining analyst. He debuted on this roster in 2013 — and this year also co-directs teams that merit runner-up positions on the Chile lineup (with Marcos Buscaglia) and in Equity Strategy (with Carlos Peyrelongue). Hirai earned a bachelor’s degree in business at the Fundação Getúlio Vargas in São Paulo. Co-captain Beker, 39, likewise holds a BA in business administration from FGV, as well as a master’s in economics from the Pontifícia Universidade Católica do São Paulo. He was an analyst at Unibanco Asset Management before signing on with BofA Merrill in March 2003. Beker left the firm and spent a year back on the buy side at the Ontario Teachers’ Pension Plan in Canada, returning in December 2009. The New York–based researcher, who first appeared on this list in 2012, also co-heads the top-ranked Economics group (with Marcos Buscaglia) and the second-place troupe on the Local-Markets Strategy lineup (with Claudio Irigoyen). Hirai and Beker together steer a four-person crew whose “breadth of knowledge is second to none,” one investment manager declares. “No one comes close to their knowledge of Brazilian companies from a historical standpoint. They’ve been an incredible resource for us.” For the balance of this year, the analysts advise, investors should focus on three Brazilian sectors that are positioned to outperform: education, private banks and utilities. Educational services providers likely will continue to benefit from favorable demographic trends, low penetration and attractive valuations, they contend. A favorite name in this space is Minas Gerais–headquartered Kroton Educacional, the largest such for-profit organization, boasting a presence in 83 domestic cities. The case for private banks is that already low valuations — the No. 1 and No. 2 lenders, São Paulo’s Itaú Unibanco Holding and Banco Bradesco, traded at an estimated seven times price to earnings last month — are unlikely to descend further, the squad contends, as investors’ wariness about the macro environment as well as potentially higher taxes through 2016 are priced in. Further, state-owned banks are throttling back loan growth, making the competitive environment a bit more rational. Finally, the prospects for Brazil’s utilities companies are improving in tandem with the regulatory environment, which is permitting higher tariffs, as well as the renewal of distribution concessions, the team notes. Preferred providers in this industry include São Paulo–based CPFL Energia and EDP – Energias do Brasil.

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