(Bloomberg) -- Deutsche Bank AG named Luis Mendes, who leads the firm’s flow-trading business for Latin America, its new country officer for Brazil as part of its effort to expand further in the region.
Mendes, a Brazilian native, will move back to Sao Paulo from New York, according to Stefan Simon, head of the Americas region and a member of the management board. Stephan Wilken, a German native who has been country chief for more than two years, is going back to Germany, as “was always the plan,” Simon said.
“We are bringing more local expertize and capabilities to the region,” Simon said in an interview at the bank’s office in Sao Paulo, where he was meeting clients and interviewing candidates for banker positions.
Deutsche Bank’s investments in Latin America in recent years are reversing a pullback it began in 2015. The Frankfurt-based bank has increased its capital in Brazil by 200 million euros ($212 million) in the past three years, and in 2019 transferred the nation’s fixed-income and currencies trading book back to Brazil from New York. Headcount in the nation has grown in each of the past two years, and is now at around 250 full-time employees. Revenue has more than doubled since 2021.
The German firm is building a local team in Brazil and Mexico for deal origination and merger-and-acquisition advisory work, reporting to the co-heads of the Latin America coverage team, Esra Turk in London and Javier Vargas in New York. In August, Alejandro Ortega joined as head of origination and advisory for Mexico.
The bank is hiring a “pretty strong presence in Brazil — a proper team,” including managing directors, directors and junior bankers, Simon said, declining to provide numbers. In April, the bank added five Credit Suisse bankers focused on Latin America to be based in New York for the investment bank’s coverage platform, including Vargas.
“That is not a Latin American topic, but it’s a global approach,” Simon said. “We want Deutsche Bank globally to strengthen its fee-driven and capital-light business lines.” The announced acquisition of a brokerage firm in the UK is part of that process, he said.
Preparing for Rebound
The idea is to do this in a “countercyclical way,” Simon said. “We want to on-board and build out these teams and these capabilities in origination and advisory — especially in the merger-and-acquisition space, the equity- and debt-capital markets space — while the market is not hot and running, and be prepared when the market picks up in 2024.”
Subject to regulatory approval, Mendes will report to Simon and Sameen Farooqui. Mendes started his career at Banco Pactual SA in 1990 as a fixed-income trader in Brazil, and had stints JPMorgan Chase & Co. and Morgan Stanley before joining the German bank as head of Brazil macro trading in February 2005. He then became co-head of global markets for Brazil, and moved to New York in 2015 to lead the emerging markets flow-trading business for the region.
“Since the formation of the global emerging-markets platform in 2019, Luis has played an instrumental role in re-building the Latin America franchise, integrating it across Asia and Europe,” Simon said, adding that Mendes has also served as vice chair of the Emerging Markets Trading Association board.
Deutsche Bank, which used to have a full-fledged bank in Mexico, relaunched a broker-dealer business there last year, focusing on fixed-income and currency trading and derivatives, risk management and finance solutions. The lender sent 100 million euros of capital to Mexico in September 2022. In July, Citigroup Inc. completed its acquisition of Deutsche Bank’s banking entity and license in Mexico.
“I had a number of client meetings already, and it is interesting the dynamic that I am seeing,” Simon said. “Dynamic in terms of strong foreign companies investing in Brazil, but also money that has been built — there are a lot of asset managers, hedge funds, that have built a lot of capital here in the previous years and now seek investments here.”
He said the bank sees many opportunities for investments in infrastructure, renewable energy and data centers.
Among recent deals Deutsche Bank handled in the region was the sale of a $550 million leveraged loan to support Bain Capital Private Equity’s acquisition of Brazilian restaurant chain Fogo de Chão. Bain agreed to buy the company in August, and the transaction is expected to be completed this month, according to a statement. The bank also was sole global coordinator and joint lead arranger on a $1 billion term loan for Colombian oil company Ecopetrol SA.
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