Brazil´s Blackstone-Backed Patria Eyes Expansion in Latam, Asia

RIO DE JANEIRO, BRAZIL – Brazilian asset manager Patria Investments Ltd, whose shareholders include Blackstone Group Inc, plans to use part of the proceeds of its US$588 million initial public offering to expand in new emerging markets, executives said on Friday, January 24th.

Patria raised US$326 million in the IPO and shareholders selling stakes will receive US$262 million. Blackstone, which acquired a 40% stake in Patria ten years ago, will reduce its stake to 14%.

Shares of Patria – which manages more than $14 billion in private equity, credit, real estate and infrastructure funds – closed 17% higher in their trading debut on Friday.

Class A shares were priced at $17 each in the initial public offering, $1 above the upper limit of its price range, reflecting demand equivalent to 14 times the amount of shares offered, Patria executives said in an interview.

The company was valued at US$2.3 billion in the IPO, and its market capitalization rose to US$2.7 billion at market close.

Senior managing partner Olimpio Matarazzo said Patria is happy with its new shareholder base, which includes long-term investors.

Chief Executive Officer Alexandre Saigh said the firm is eying acquisitions in Mexico, Colombia, Peru, Chile and Brazil and may later pursue an expansion in Asia.

“We want to be the leading alternative investment fund manager for emerging countries,” he said. “Alternative assets have attracted a lot of money with global low interest rates.”

Proceeds will also be used to invest in its own funds and to acquire portfolios and distribution channels.

Blackstone and Patria agreed to pursue the IPO to allow the U.S. firm to trim its stake after Brazilian founders refused an offer to sell control.

Patria’s IPO comes as asset managers in Brazil are seeing record inflows from investors, at a time when the benchmark interest rate in Latin America’s largest economy is at a record low of 2%. Last year, net new money to the industry totaled R$156.4 billion, according to industry group Anbima.

Another Brazilian asset manager, Vinci Partners, has also filed for an IPO on the Nasdaq stock exchange, which may value it at US$1 billion.