André Esteves

André Esteves
Born	Rio de Janeiro, Brazil
Residence	Sao Paulo, Brazil
Alma mater	Federal University of Rio de Janeiro
Net worth	US$ 2.2 billion (October 2015)
Spouse(s)	Lillian Esteves
Children	3

André Santos Esteves was ranked by The Forbes World's Billionaires as #628 with a net worth of US$2.2 billion. Among Brazilian billionaires, Esteves is ranked as #13 with a net worth of R$9.07 billion.

Personal life

André Esteves born into a middle-class family in Rio de Janeiro, and obtained his Bachelor's degree in computer science from the Federal University of Rio de Janeiro. Esteves has three children, and The New York Times writes that "he has driven the same Mercedes pickup for four years and takes only two weeks of vacation a year." Andre Esteves owns a Dassault Falcon private jet worth $50 million USD. When interviewed about his downtime, "Esteves professes a love of his job, though he also enjoys cinema, wine and good food."

Career

After graduating from the Federal University of Rio de Janeiro, André Esteves joined Pactual and within "a year he was a member of the bank's foreign debt trading team, and within two he was managing IPOs and M&A deals." In 1992, Esteves made a partner for helping the bank "to post a 59 percent return on capital". UBS purchased Pactual in December 2006, and in June 2008, Esteves left the bank along with key Brazilian partners to create BTG, a global investment company. In April 2009, Esteves, along with other partners, purchased Pactual back from UBS for $2.5 billion. He discussed these events in 2013 in an interview for the Creating Emerging Markets project at the Harvard Business School. Andre Esteves arrives at his office as early as 6:30 AM and "often calls partners together for meetings as late as 10:00 p.m." He also holds regular study meetings with BTG Pactual directors at his home.

Philanthropy

James Crombie of LatinFinance writes that "Esteves supports education and environmental charities". André Esteves has also supported initiatives, projects and institutions that help to improve education, healthcare and promote arts in Brazil. Institutions like the Universidade de São Paulo, the "Hospital de Câncer de Barretos" and the Museu de Arte Moderna de São Paulo are among those supported by Esteves BTG Pactual as CEO. He is a board member of Conservation International." André Esteves has also donated to Harvard Business School, in order that Baker Hall might be renovated; it will be renamed Esteves Hall, in honour of him. This Harvard dormitory is used by many international students, especially those from Esteves' home country, Brazil.

Prizes

• Person of the Year by the Brazilian Chamber of Commerce of UK in 2014.
• Person of the Year by the US-Brazil Chamber of Commerce in 2012.
• One of the 50 most influential people in the world by "Bloomberg" in 2012.
• Prominent Executive in the area of banks and financial institutions by Valor Econômico newspaper for three consecutive years,in 2011, 2012 and 2013.
• One of the most admired leaders of the Year by Carta Capital magazine for two consecutive years in 2011 and 2012.
• One of the "100 Most Influential Brazilians " by Epoca magazine for four consecutive years, in 2009, 2010, 2011 and 2012.
• Personality of the Year by Latin Finance in 2010.
• One of the 25 most influential executives in the financial sector, according to Institutional Investor survey in 2009.
• Entrepreneur of the year, according to the "Isto É Dinheiro" magazine for two years, in 2011 and 2014.
• Appointed leader in Financial by Leaders of Brazil in 2012.

BTG Pactual

Main article: BTG Pactual

BTG Pactual, bank in which André Esteves was "CEO", offers advisory services in merger transactions and acquisitions, equity, debt underwriting, asset management, wealth management, sales and trading, loans and financing (corporate lending) and fund management for clients including corporations, financial institutions, governments and high-net-worth people. The Bank is also active in proprietary investments (both class of net assets as of non-liquid assets). It is recognized as one of the leading investment banks in emerging markets, the largest independent investment bank and the largest asset manager in Brazil

Awards granted to BTG Pactual

• Most Innovative Investment Bank in Latin America by The Banker (2013) and Brazil's and Chile's Best Investment Bank by World Finance (2013)
• Leader in share issues in Latin America since 2004 (Dealogic) and Brazil (Bloomberg, 2012), Best Merger&Acquisition House (Brazil) and Best Equity House (Brazil, Chile and Latin America) by Euromoney (2013)
• Leader in volume and number of bonds transactions for Brazilian companies in the international market (Dealogic, 2013) and in M&A transactions in Brazil (Thomson Reuters, 2013);
• Considered the best Research company in Latin America (2012) and Brazil (2012 and 2013) and leader in Sales&Trading in Latin America (2013) and Brazil (2012 and 2013) by Institutional Investor
• Asset Management area voted Best Funds Manager of Brazil by "Exame" magazine/FGV, for two consecutive years (2011 and 2012)
• Wealth Management area chosen as the Best Private Bank in Brazil by The Banker and Euromoney magazines (2013)

Controversy

Insider trading

In April 2012, André Esteves was fined €350,000 for insider trading in Italy and officials "also froze €4.2 million of Mr. Esteves's personal assets and barred him from acting as an officer in an Italian company for six months." Italy’s Consob did this because they stated that "the 43-year-old Latin American banker bought the shares in November 2007 knowing that the group was planning to enter a joint venture with Brazilian rival JBS." Esteves' insider trading "force[d] the bank to amend its prospectus, give investors the option of reconsidering bids for BTG shares, and put a cloud over one of this year's highest profile bank deals." Reuters reported that the "Consob said it notified Esteves of its accusations in November 2010. It said Esteves denied the allegations." Furthermore, Andre Esteves planned to "appeal the action", but did not do so, citing cost and a loss of time as his reasons.

In 2013, Charles Rosier, a partner of BTG Pactual, was convicted in the largest insider trading case in the history of France. While at UBS, at the end of March and early April 2008, he and his cousin Joseph Raad used inside information to purchase shares and options in Geodis just before the announcement of a takeover bid. Of significance, Rosier worked at UBS when he participated in the insider trades when André Esteves, now CEO and partner and director of BTG Pactual, was still employed by UBS as head of fixed income in charge of $1.7 trillion USD. Esteves had also committed inside trades while at UBS only a few months earlier in November 2007. Also of significance, Huw Jenkins, partner and director and chairman of BTG Pactual and formerly CEO of UBS Investment Bank, was a consultant to UBS at the same time.

Pactual sale to UBS and resale to BTG

Arthur Rutishauser in Sonntagszeitung argued that the way Esteves acquired 27% of his bank is an example of an insider case: Esteves sold the bank in 2006 for 3.1 billion Swiss Francs to UBS, where at that time Huw Jenkins was a key decision maker, and heavily involved in that transaction. Esteves later repurchased Pactual back in 2009 for 2.5 billion Swiss Francs after being allowed to leave UBS to set up BTG. Huw Jenkins was ejected from UBS in 2007 and disappeared from view, to then resurface as a senior partner and Board member at BTG Pactual in 2010.

Lawsuit in Hong Kong by Ex-Employee Zeljko Ivic

The Chief Executive Officer (CEO) of BTG Pactual André Esteves, and a member of the board of directors Huw Jenkins, reportedly "made fraudulent misrepresentations to get Zeljko Ivic to sign agreements with Banco BTG Pactual SA, according to a lawsuit filed with the Hong Kong High Court." Robert Tibbo, Zeljko Ivic's attorney, has stated that Zeljko Ivic played a key role in Banco BTG Pactual SA's IPO. Ivic states that he was the key player in fundraising with nine entities, including the China Investment Corporation, GIC Private Limited, as well as the Agnelli and Rothschild families. As such, Ivic is making a case against Banco BTG Pactual SA, BTG Pactual Asia Ltd., CEO Andre Esteves and director Huw Jenkins, and $20 million USD is the amount of the lawsuit, which will serve as compensation for the value of BTG Pactual's shares, promised partnership and unpaid bonuses to Zeljko Ivic.

Conflict with Brazilian Regulators and Central Bank

Bloomberg reported that "In three separate cases since 1999, Brazil’s central bank and securities commission alleged Pactual had illegally transferred profits to foreign funds to disguise gains and avoid taxes." As such, "Esteves and his partners received warnings in the first two incidents." Furthermore, "In the third, he and another partner were ordered to pay a combined settlement of 100,000 reais ($50,000), with Pactual paying another 4 million reais."

Involvement in Sete

On 19 June 2015, Marcelo Odebrecht, the CEO of Brazil’s largest construction company was arrested by Brazilian Federal Police. Odebrecht was arrested on allegations of fraud, corruption, money laundering and organized crime relating to contracts worth billions of dollars with the rigs company Sete and the state oil company Petrobras. While in detention, Odebrecht attempted to pass a handwritten note to his lawyers that included and mentioned André Esteves, thus potentially implicating BTG Pactual and Andre Esteves in Lava Jato. One of Sete’s largest shareholders is BTG Pactual headed by CEO André Esteves. In the handwritten note, Odebrecht requested his lawyers to "destroy rigs’ email." Sete Brasil was founded aiming to facilitate and enable the construction of ultra-deep water drilling rigs in the country. Seven companies became investors of the company, the pension funds: Petros, Previ, Funcef and Valia, besides the banks Santander, Bradesco and BTG Pactual. Next, Petrobras joined to this group of investors. Development bank BNDES, which previously agreed to extend financing, withheld funds after former Sete Brasil COO Pedro Barusco testified in late 2014 that he accepted bribes in exchange for awarding contracts as part of a wider corruption probe known as Lava Jato (Carwash in Portuguese). In the first quarter of 2015, BTG Pactual recorded a provision for the impairment to the investment equivalent to approximately 25% of its book value, which had a gross negative impact to revenues of R$280million.

Arrest

File:André Esteves a caminho do presídio 01.jpg

André Esteves being arrested in 2015

On 25 November 2015, Esteves was arrested as part of a scandal investigation into Petrobras after he was investigated for his bank's dealings with the oil company.

On November 29, 2015 it was reported that the Brazilian Supreme Court decided to extend banker's arrest, according to Esteves's lawyer. According to the same report by Bloomberg News, BTG Pactual’s partners are in talks to buy Esteves’s 22% to 24% stake including a "golden share" which gave the former CEO control of the firm.

Esteves Wins Release From Jail

On December 17, 2015, Esteves won his release from jail, three weeks after being arrested. BTG’s bonds and shares soared. Esteves must remain at home until he finds a new job, the press office of Brazil’s supreme court said Thursday in Brasilia. The ruling by Judge Teori Zavascki says he can’t have a management role in any of the companies being investigated as part of the corruption probe. The names of those companies were kept sealed. Shares of BTG rose 7.7 percent to 15.62 reais at 3:55 p.m. in Sao Paulo, after gaining as much as 12 percent earlier Thursday. The company’s $1 billion of notes due 2020 rose 3.1 cents to 72.15 cents on the dollar. Esteves’s attorneys argued that he was only arrested because he’s one of the wealthiest people in Brazil, according to court documents filed this month with the supreme court. After landing a job, Esteves must still remain at home at night and during days off, according to the supreme court’s press office, which said he must surrender his passport and appear in court every 15 days. A BTG press official said the bank had no immediate comment.

Back to The Game

On the 27th of April, 2016, hours after Brazil’s Supreme Court freed him from house arrest, a smiling Andre Esteves addressed employees in an auditorium at Grupo BTG Pactual’s headquarters to deliver an important message: he’s back. The bank confirmed in a statement that he’ll be a senior partner, advising on strategy and the development of activities and operations. In his remarks, Esteves denied wrongdoing, as he has in the past; he’s accused in the sweeping pay-to-play corruption probe called Operation Carwash. The 47-year-old spent three weeks in Rio de Janeiro’s infamous Bangu prison on allegations he tried to tamper with the testimony of a former Petroleo Brasileiro SA executive in the investigation that has engulfed the state-run oil giant. He was released from Bangu in December and ordered to be held instead under house arrest. Brazil’s high court lifted that order, and Esteves’s lawyer, Antonio Carlos de Almeida Castro, said by text message that the billionaire is free of all charges and can return to the office. BTG shares rose 1.6 percent to 19.97 reais as of 4:38 p.m. in Sao Paulo trading on Wednesday. It followed a 6.2 percent rally on Tuesday.