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JP Morgan just signed a deal to buy 55% of Gàvea, a $6 billion Brazilian hedge fund, as part of a broader deepening of its presence there, the FT reports.The big investment banks are moving into BRICs in a big way and it makes complete sense. With near zero interest rates on the horizon forever in the big developed economies, BRICs are where it’s at.
And Brazil is probably the best BRIC. It’s democratic (unlike Russia and China) and its government is not completely ineffective (unlike India), its macroeconomic policies have been sound for over a decade now and it’s got plenty of cool commodities like sugar cane for ethanol.
JPMorgan has already boosted its headcount in Brazil from 300 to 500 this year and plans to take it to 1,500 within eighteen months. UBS and Goldman are also expanding there in a big way. Private equity firms like Blackstone, Carlyle and Warburg Pincus have also done big deals in Brazil recently.