The year 2006 has already shown much foreign interest in Brazil’s growing financial sector. So far, the strategy has been to acquire established Brazilian banks with strong market share, rather than compete directly with them.

In May of this year, UBS acquired Rio de Janeiro based Banco Pactual for $2.6 billion (USD). The deal calls for a $1 billion (USD) payment upfront with the remaining $1.6 billion (USD) due in five years. Pactual is a leading investment bank in Brazil, with an especially strong grasp on the local wealth management sector. Pactual’s services also include trading, fixed income, capital markets and corporate finance advisory.

As of September, Credit Suisse was in the advanced stages of acquiring Sao Paulo based brokerage house Hedging-Griffo for $400 million (USD). Hedging-Griffo operates a brokerage, an asset management department and a private bank and manages over R$14 billion in investment funds and accounts. Hedging-Griffo has also provided capital to Multicred for some of its larger debt acquisitions. In 1998, Credit Suisse also acquired Brazilian investment bank Banco Garantia.

It is now reported that Lehman Brothers; who just acquired a large Brazilian debt portfolio; is looking into purchasing a small investment bank called Banco Fator. Banco Fator is based in Rio and the deal is reportedly worth $400 million (USD).