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Billionaire Andre Esteves Back In Spotlight Five Years After Arrest

Felipe Marques

(Bloomberg) -- Andre Esteves, once the golden boy of Brazilian finance, has been gradually taking on a more public role since his arrest five years ago, culminating in an appearance Wednesday in which he headlined a conference and laid out an optimistic vision for Latin America’s largest economy.

Now 51 and a little grayer at the temples, Esteves was more statesman than banker as he spoke to a crowd of more than 700 and touched on topics ranging from Brazil’s growth prospects to its currency and even the nation’s controversial president, Jair Bolsonaro.

He made no mention of Banco BTG Pactual SA, the financial powerhouse he helped found, nor did he comment on his 23-day stint in an infamous Rio de Janeiro prison after an arrest that nearly toppled his empire. All charges against him were dismissed.

Esteves laid out a scenario of moderate -- “even mediocre” -- growth for Brazil in coming years during a one-hour Q&A with a Brazilian journalist kicking off the second day of BTG’s annual conference in Sao Paulo. Expansion will be far from spectacular at about 2% or 3% a year, but it’ll be enough to keep Brazilians happy, he said.

Growth Agenda

“We’re going to push growth by empowering capital markets and by making micro and macro economic reforms, reinforcing fiscal strength and by reducing the size of the state,” he said. “This is the agenda for growth and not by pushing down interest rates.”

Though Esteves has made public appearances in the years since he stepped down as BTG’s chief executive officer following his 2015 arrest, including at the World Economic Forum in Davos, this was the first time he took the spotlight.

Esteves, who has a degree in engineering, began his career as a computer technician at Banco Pactual, BTG’s predecessor, in 1989, before moving to the trading desk and the fixed-income team. By 2002, he was a managing partner and in 2006, Pactual was sold to UBS for $2.6 billion. Esteves became one of Brazil’s youngest self-made billionaires. He and his partners bought the bank back three years later and set out to expand operations. BTG went public in 2012.

Then came the sweeping corruption scandal known as Carwash, which over several years toppled dozens of well-known politicians and business leaders. Esteves was arrested in late 2015 for allegedly participating in a scheme to tamper with the testimony of a former Petroleo Brasileiro SA executive.

Liquidity Crisis

While prosecutors later acknowledged they didn’t have enough evidence to move forward with charges or a trial, the scandal threw BTG into a liquidity crisis amid a surge of customer redemptions. The bank was forced to seek a rescue of 6 billion reais ($1.4 billion) from Brazil’s privately owned deposit-insurance fund, and in the following months, it unloaded more than $3.5 billion in assets while also cutting jobs.

The bank welcomed Esteves back as a senior partner two days after he was freed from house arrest in April 2016. In December, Brazil’s central bank cleared Esteves to return as a member of the bank’s controlling group. At a recent press conference, BTG CEO Roberto Sallouti said having Esteves -- who’s worth about $3 billion, according to the Bloomberg Billionaires Index -- back in the group fixes “an absurd injustice.”

At Wednesday’s conference, Esteves waded into Brazilian politics, saying Bolsonaro “has matured politically over the past year” and has a better relationship with other branches of the government than suggested by press headlines.

“Our democracy is very healthy and doing well, thanks,” Esteves said. “The economic agenda is exceptional.”

Asked about what his biggest fear was, Esteves was quick to answer: “Ignorance, and nothing else.”

--With assistance from Ricardo Strulovici Wolfrid.

To contact the reporter on this story: Felipe Marques in Sao Paulo at fmarques10@bloomberg.net

To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Jessica Brice, Steven Crabill

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