Galapagos Capital, an investment firm run by former Banco BTG Pactual partners, acquired a Brazilian asset manager in a bid to expand its fund offerings.
(Bloomberg) — Galapagos Capital, an investment firm run by former Banco BTG Pactual partners, acquired a Brazilian asset manager in a bid to expand its fund offerings.
Galapagos’s purchase of Frontier Capital, which manages about 42 million reais ($8.3 million) across two equity funds, gives its clients access to the investments, Chief Investment Officer Fabio Guarda said in an interview.
“We felt the need of having equity products to help our clients take advantage of gains in stock markets, and in March started looking for acquisitions,” Guarda said. It chose Frontier because of its solid track record and cohesive team, he added.
Since BTG’s former head of private equity, Carlos Fonseca, set up Galapagos in 2019, the firm has expanded through several acquisitions. It recently acquired wealth manager Taler and hired executives from Mandatto, which manages the assets of wealthy families. Galapagos bought mergers-and-acquisitions advisory boutique Cypress earlier this year and purchased Ativa Wealth Management in 2020.
For Frontier, the acquisition will help it “keep growing with more strength,” said Rodrigo Fonseca, its chief investment officer. The deal allows it to focus more on equity fund management while also serving Galapagos Capital clients, including institutional ones, he said.
With about eight employees, Frontier was one of dozens of new shops to emerge on the back of low interest rates in the South American country, aiming to cater to a wave of Brazilians who became more willing to take on risk. As rates returned to double digits in the aftermath of the pandemic, the industry was stung by redemptions and clients fled.
Galapagos has about 20 billion reais under management, including in its asset-management business. It also provides investment-banking services such as advisory and deal structuring. The firm is moving to another office in order to bring all its 312 employees — including all acquired companies — together. Bruno Carvalho, another former BTG partner, is also a senior partner at the firm.
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