Goldman Sachs to double Brazilian unit's capital: source
SAO PAULO (Reuters) - U.S. investment bank Goldman Sachs Group (GS.N) 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.
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)