U.S. investment bank Goldman Sachs Group will double the capital of its Brazilian unit to about $400 million to leverage growth in fast-growing activities such as structured finance and corporate lending, a source with knowledge of the decision told Reuters on Tuesday.
Goldman Sachs, which has expanded its workforce in Latin America's biggest country over the past two years to 300 from a little less than 150, is ramping up its capital base in Brazil as part of "an adjustment of strategy," said the source, who declined to be cited by name.
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The bank is seeking fast grow in Brazil, where demand for debt and hedging instruments has swelled as interest rates have fallen to all-time lows this year. Companies and investors are stepping up demand for corporate bonds, asset-backed securities and private equity fund-related vehicles posting higher returns than equities and government debt.
As part of its changed strategy, Goldman Sachs will shut down a unit overseeing the administration of local investment funds, with about $159 million under management, the source added. The Wall Street bank will continue offering off-shore funds services to clients, the source said.
The news was reported by local magazine Exame's online service earlier on Tuesday.
Goldman Sachs became a full-service financial institution in Brazil more than three years ago.
(Reporting by Guillermo Parra-Bernal; editing by John Wallace)