BTG Pactual is once again No. 1 in Brazil sales.
After reclaiming the crown last year, the Brazilian bank has defended its title against global and domestic competitors in Institutional Investor’s 2020 All-Brazil Sales Team.
Local bank Bradesco BBI placed second in the annual ranking of generalist sales teams, while JPMorgan Chase & Co. dropped to third. Itaú BBA and Santander took fourth and fifth, respectively. The results were decided by some 240 buy-side money managers at more than 180 firms with major holdings in Latin America.
The top sales team may be unchanged from 2019, but Brazil — like the rest of the world — looks drastically different than it did a year ago. “Prior to the pandemic there was almost a euphoria when it came to Brazil, especially amongst locals,” said Ashley Farrar, head of U.S. equity sales at BTG Pactual. “While clearly things have changed, I think there is still a very strong belief that the future is bright.”
Thanks to government reforms, low interest rates, and other positive economic indicators, Brazil was leading Latin America’s outperformance last year, confirmed Camila Penna, head of international sales at JPMorgan. But the country “was also the one to take the largest hit once risk-off began post Covid-19 acceleration, as political turbulence increased in conjunction with economic deceleration,” Penna said.
A series of reforms to Brazil’s social security system had been approved by the country’s senate in late fall, but their timing is now being called into question amid the coronavirus pandemic.
“The reform agenda has taken a back seat to the current health crisis, but at this point both congress and the administration remain committed to pursuing these goals long term,” said BTG Pactual’s Farrar. “How quickly it can happen is another question, and how quickly it needs to happen is going to depend on how good they are at making sure some of the short-term measures they take don’t produce collateral damage.”
[II Deep Dive: How JPMorgan Adapted to Selling Remotely]
The biggest concerns for foreign institutional investors right now, according to Farrar, are long-term economic stability and when the real will stop depreciating. “Brazil made a great deal of progress in last few years and investors just want to make sure that they don’t repeat the same mistakes coming out of this crisis as they did the last,” she added.
She believes that investors will continue to gravitate to firms providing high-quality research. “Even with the robust capital markets calendar last year, I think our analysts really stepped up, producing high quality, in-depth research,” Farrar said. “Now that research is 100 percent of their focus, analysts have been able to explore some long-term themes that maybe they didn’t have time to do before. Also they are staying close to the companies and speaking to them as often as possible given how fluid and unprecedented the situation is.”
How sales teams collaborate with their research counterparts will also be a differentiator, according to Farrar. “We have always had a very robust and dynamic dialogue with research,” she said. “I think we [the sales team] are often a source of a lot of their thematic reports because we listen to clients and work hard to understand what is value added to them in their investment process.”
Given the pandemic, all of this must now be done in an evolving virtual environment for sales, analysts, and their clients. “We are in a business of constant change,” said JPMorgan’s Pena. “At times, these changes are accelerated by outside factors — as was the case with this global epidemic. Therefore, we need to be running business models that are flexible to adapt and allow for innovation.”
The current global upheaval also means investors need to be more discerning with their time and attention, according to BTG Pactual’s Farrar. “I think with volatile markets, investors’ time is even more limited, so making sure we focus on what they care about and not inundating them with product will be even more value added this year,” she said. “Quality over quantity always wins long term, but I think in this environment that becomes even more critical.”
While the main leaderboard was weighted by how much voters spent on sell-side commissions, II also produced a set of results weighted by assets under management. BTG Pactual topped these as well, followed by Bradesco BBI in second, JPMorgan in third, and Santander in fourth. Itaú BBA rounded out the top five.
