BTG Pactual Asset Management U.S. (BTG) is a fee-based firm providing advisory services to individuals, private investment funds and various other institutional clients. Based in New York City, the financial advisor serves nearly 200 clients. Currently, the firm has billions in assets under management (AUM).
BTG Pactual Background
Founded in 2011, BTG Pactual is wholly owned by Banco BTG Pactual S.A., a Brazilian investment firm. BTG also works with BTG Pactual Timberland Investment Group, LLC to offer investment advice to managed accounts or private funds focused on timberland investments.
BTG Pactual Client Types and Minimum Account Sizes
BTG’s minimum account size requirement of $1 million applies to individuals, private investment funds, pension funds, insurance companies, banks, foundations, endowments, trusts, estates, family offices, proprietary accounts, BTG affiliates and other institutions.
Services Offered by BTG Pactual
BTG mainly provides discretionary and non-discretionary portfolio management services to institutional clients and individuals, but the firm also serves as a sub-advisor for private funds.
BTG Pactual Investment Philosophy
BTG says it uses an “absolute return” approach to its investment process, and the firm applies both top-down and bottom-up analysis to find investment opportunities. In providing traditional and alternative investments, BTG employs an extensive range of strategies, including: currencies, merger arbitrage, event driven and special situations, corporate and sovereign debt, long/short credit, asset-backed securities, global rates and foreign exchange, structured products and relative value equities strategies.
The firm may invest in U.S. treasuries, asset-backed securities, swaps, bonds and equities.
Fees Under BTG Pactual
There are generally three types of fees at BTG. The firm charges private fund fees, managed account fees and performance-based fees. For private funds, BTG charges up to 2% of AUM, and the firm says the fees may vary depending on size, strategy and complexity.
Managed accounts come with negotiable asset-based fees. For performance-based accounts, BTG charges a fee based on a share of capital gains (or capital appreciation of) a client’s AUM.
Clients may also encounter custody fees, transaction fees and trading and brokerage fees.
What to Watch Out For
This firm has seven regulatory action disclosures that involve one or more of BTG’s advisory affiliates. Its most recent violation was settled in 2015 when Banco BTG Pactual S.A. paid a $50,000 fine for allegedly violating a New York Mercantile Exchange rule.
This firm has performance-based fee and asset-based fee arrangements, so conflicts of interest may arise if advisors favor performance-based accounts solely because they provide more compensation than asset-based accounts. A conflict of interest also exists where advisors favor performance-based accounts generating higher fees that other performance-based accounts. In addition, fees generated from certain private funds may be higher than others.
As a fiduciary, BTG has policies and procedures in place to reduce such conflicts, but its potential conflicts of interest are still important to keep in mind.
Opening an Account with BTG Pactual
For those interested in opening an account at BTG Pactual, submit a contact form on the firm's website.
Tips for Investing
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