The changes at G5, the BRL 30 billion MFO that grows 30% a year

2023-06-15 04:09:21

G5 Partners — owner of one of the largest multifamily offices do Brasil — is making internal changes to its governance, realigning team incentives and trying to forge itself as a consolidator in the wealth management market.

As part of the changes, Corrado Varoli — the veteran Goldman banker who co-founded G5 16 years ago — is stepping down from day-to-day duties to lead an advisory board that is being constituted and will include members from outside the firm, as well as ceding part of its equity to minority shareholders.

Renato Klarnet and Marcelo Lajchter, the other two co-founders, become co-CEOs of the company, which today has around 100 executives, 26 of which are partners.

The changes come at a time when the business Wealth management increased its share of G5’s total revenue, which should earn BRL 200 million this year depending on what happens in the IB business, which is typically more volatile.

G5 today allocates more than R$ 30 billion to entrepreneurs and liquid families, which makes it one of the largest independent MFOs in the country in a list that includes names like Julius Baer, ​​Turim and Pragma.

Last year, for the first time, the wealth management business became the company’s main revenue, following 15 years of market dominance. investment banking. MFO has grown 30% annually over the last 5 years – faster than the consolidated company’s 21% revenue growth.

And while for a long time G5 had only two business verticals, in recent years the company has set up a credit area, another for debt structuring and distribution (DCM), and has bought a minority stake in G5 Venture Capital, which invests in technology.

At the end of 2020, as now, Corrado had already agreed to give up some equity to make room for other partners whose work has been relevant to the company’s growth, but the banker, one of the most experienced in activity at Faria Lima, has no plans to retire, according to a family with transit along the G5.

Among other iconic transactions, Corrado advised Oi’s creditors during the company’s RJ, the Marinho family on the sale of São Marcos, American Express on the sale of its Brazilian assets to Bradesco, Interbrew on its merger with Ambev, and Telmex in the acquisition of Embratel.

At G5, its movements have allowed the rise of other partners. In MFO, the list is headed by André Benchimolresponsible for the commercial area and the only member of the executive committee along with Corrado, Marcelo and Renato; Renan Regowho should replace Renato as CIO; Edward Weisskopfthe head of risk and middle office; e Roberto Freitasresponsible for wealth planning and also the general counsel from G5.

On the IB side, partners such as Levindo Santos, Rodrigo Fraga e Daniel Lombardiwhich are involved in both M&A and restructuring, have also gained relevance.

In large part, this mobility has also been possible because six years ago the partners managed to buy back the 50% of the firm they had sold to Evercore, from Roger Altman, the banker who made a career at Lehman, Blackstone and the US Treasury.

The divorce allowed the MFO business to flourish: since then, G5 has multiplied by three and doubled your headcount.

According to people with a G5 transit, the founders’ goal is to fill the advisory board with at least two executives from outside the company and complementary skills.

The board will address issues that are expected to impact the future of the wealth management business, such as artificial intelligence, and an inorganic growth agenda.

Geraldo Samor and Pedro Arbex

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