BRBI BR Partners S.A.

BRBI BR Partners S.A. operates as an independent Brazilian investment bank, providing financial advisory and capital markets services primarily in Brazil. The company was founded in 2009 and has since expanded its operating platform to include capital markets, credit, treasury, financial restructuring, fund management, and investments. The Brazilian M&A and financial advisory sector, where BR Partners operates, is characterized by services related to mergers, acquisitions, divestments, appraisal reports, fairness opinions, restructurings, and privatizations. Brazil is identified as the leading country in Latin America for M&A transactions, supported by substantial natural resources and a population exceeding 200 million, positioning it as one of the top 10 global economies with the highest GDP in its region. The industry is served by wholesale banks, investment banks, M&A boutiques, financial advisory and consulting companies, law firms, and independent professionals.

BR Partners' core business model revolves around generating revenue through four key business lines: investment banking and capital markets, treasury sales & structuring, investments and wealth management, and capital remuneration. The company emphasizes a client-centric approach, offering customized solutions and leveraging its extensive network of relationships with business leaders, institutional investors, and high-net-worth individuals (HNWIs). A significant aspect of its strategy involves co-investing in capital markets transactions, typically purchasing 5% to 20% of underwritten offerings, to align interests with clients, enhance investor confidence, and foster secondary market liquidity. The company also highlights its ability to cross-sell high value-added products and services across its interconnected business lines.

The Investment Banking and Capital Markets business line generated total revenue of R$304.0 million ⁴ in 2025, a decrease from R$352.8 million ⁵ in 2024 and an increase from R$240.7 million ⁶ in 2023. This segment offers financial and strategic advisory services for M&A transactions, equity purchases and sales, fundraising, strategic partnerships, corporate restructuring, and M&A defensive tactics. It also provides restructuring advisory services, assisting clients in debt renegotiations and capital structure adaptation. The Capital Markets operations within this segment focus on structuring and distributing financial products like debentures, CRIs, CRAs, FIIs, and FIDCs, primarily through private placements to qualified professional investors.

The Treasury Sales & Structuring business line reported total revenue of R$86.7 million ⁷ in 2025, a slight decrease from R$88.3 million ⁸ in 2024, but an increase from R$65.1 million ⁹ in 2023. This line advises on, structures, and executes foreign exchange, derivatives, and surety transactions for corporate and institutional clients. It also handles bank fundraising through products such as CDBs, LCIs, LCAs, and LFs, and is responsible for treasury management and asset and liability management (ALM). Revenue is generated from spreads on foreign exchange and derivatives, and commissions on sureties, rather than proprietary trading positions.

The Investments and Wealth Management business line saw its total revenue increase significantly by 31.7% ¹⁰ to R$15.8 million ¹¹ in 2025, up from R$12.0 million ¹² in 2024 and R$6.0 million ¹³ in 2023. This segment includes investment operations focused on acquiring minority equity interests in small and middle-market privately held companies through investment vehicles like FIPs, with approximately 86% ¹⁴ of capital raised from third parties. Revenue is derived from management fees, performance fees, fees on new investments, and returns on proprietary investments. The wealth management operations, initiated in September 2023, manage assets for wealthy families and individuals, operating as a fee-based advisory service without holding custody of assets, and had R$5.9 billion ¹⁵ in Wealth under Advisory (WuA) as of December 31, 2025, compared to R$5.2 billion ¹⁶ in 2024 and R$2.3 billion ¹⁷ in 2023.

The Capital Remuneration business line generated total revenue of R$124.9 million ¹⁸ in 2025, a decrease from R$128.1 million ¹⁹ in 2024, but an increase from R$124.1 million ²⁰ in 2023. This segment generates returns through investments in liquid assets, such as publicly-traded securities linked to the CDI rate, and the reappraisal of assets managed by its investment operations. These returns are used to fund transactions in other business lines.

For the fiscal year ended December 31, 2025, BR Partners reported total revenues of R$531.4 million ²¹, a decrease of 8.6% ²² from R$581.2 million ²³ in 2024. Net interest revenue and gains on financial instruments decreased by 2.2% ²⁴ to R$211.6 million ²⁵ in 2025 from R$216.4 million ²⁶ in 2024. Revenues from rendering of services decreased by 12.3% ²⁷ to R$319.8 million ²⁸ in 2025 from R$364.8 million ²⁹ in 2024. Personnel expenses decreased by 12.1% ³⁰ to R$126.5 million ³¹, and administrative expenses decreased by 12.9% ³² to R$119.0 million ³³. Profit for the year was R$175.1 million ³⁴, down 9.6% ³⁵ from R$193.6 million ³⁶ in 2024. As of December 31, 2025, total assets were R$17.5 billion ³⁷, and shareholders' equity was R$783.3 million ³⁸. Cash and cash equivalents were R$137.8 million ³⁹, a 76.0% ⁴⁰ decrease from R$575.2 million ⁴¹ in 2024. Total liabilities were R$16,699.3 million ⁴². The company's Basel Ratio for BR Partners Banco was 22.6% ⁴³ as of December 31, 2025, exceeding the Brazilian Central Bank's minimum requirement of 11% ⁴⁴.

Comparing 2025 to 2024, total revenue decreased by 8.6% ²². The Investment Banking and Capital Markets segment experienced a 13.8% ⁴⁵ revenue decrease, primarily due to lower M&A activity and a shift towards lower-fee restructuring and fairness opinion assignments, despite a slight increase in the number of investment banking transactions to 16 ⁴⁶ from 14 ⁴⁷. Capital markets transactions also declined in number to 39 ⁴⁸ from 57 ⁴⁹ and volume to R$9.8 billion ⁵⁰ from R$10.5 billion ⁵¹. Treasury Sales & Structuring revenue decreased by 1.9% ⁵², attributed to stable client activity but increased competition and tighter spreads. In contrast, the Investments and Wealth Management segment saw a 31.7% ¹⁰ revenue increase, driven by a 14.7% ⁵³ rise in WuA to R$5.9 billion ¹⁵. Capital Remuneration revenue decreased by 2.5% ⁵⁴ due to lower average shareholders' equity and a reduced spread on the private securities portfolio. Personnel expenses decreased by 12.1% ³⁰ due to a reduction in bonus provisions, and administrative expenses decreased by 12.9% ³² due to lower outsourced service expenses, particularly referral fees. Income taxes increased by 25.8% ⁵⁵ due to a shift in revenue mix towards higher interest income, which is subject to a higher effective tax rate.

During 2025, BR Partners changed its name from BR Advisory Partners Participações S.A. to BRBI BR Partners S.A. ⁵⁶ to simplify its corporate identity. The company's digital platform, exclusively for selected high-income investors in its wealth management business line, is operational, offering comprehensive portfolio overviews and facilitating investment orders, withdrawals, and wire transfers. Capital expenditures in 2025 totaled R$1.0 million ⁵⁷, primarily for hardware at 90% ⁵⁸ of the total. A significant cyber-attack in 2022 led to a review of cyber defenses, enhanced security policies, and implementation of new technologies and processes. In August 2025, an intragroup corporate reorganization resulted in the partial spin-off of Black River Holdings e Investimentos Ltda. from BR Partners Holdco Participações S.A., with Black River becoming the holder of 40.85% ⁵⁹ of common shares and 26.1% ⁶⁰ of total capital, and BR Holdco retaining 35.59% ⁶¹ of common shares and 17.45% ⁶² of preferred shares. A shareholders' agreement was established to govern the relationship between these controlling shareholders.

Management anticipates continued growth in Wealth under Advisory (WuA) in the near term as the company further promotes its wealth management services and invests in its platform. Over the longer term, the company expects the growth in WuA to stabilize as its wealth management operations mature. This growth is a strategic pillar for originating new business across investment banking, capital markets, and treasury sales & structuring, by leveraging access to high-net-worth families and companies.

The company's digital platform is a key growth area, designed to enhance communication with existing wealth management clients by providing a comprehensive overview of their investment portfolios and an additional channel for interaction. This platform, exclusively for selected high-income investors, allows clients to access bank statements, place investment orders, request withdrawals, make wire transfers, and monitor portfolio evolution and profitability. It also offers a structured grid of fixed income products.

In terms of operational outlook, the company's cost of funding from financial liabilities is generally tied to floating rates, such as the SELIC rate, and is therefore affected by fluctuations in interest rates. While higher interest rates generally benefit interest revenues and gains on financial instruments, they can adversely affect revenues from rendering of services due to increased cost of debt impacting M&A and debt capital markets activity. Conversely, lower interest rate environments generally benefit service revenues. The company aims to optimize for overall financial performance by controlling certain expenses on a company-wide basis. Personnel expenses decreased by 12.1% ³⁰ in 2025 due to a reduction in bonus provisions, and administrative expenses decreased by 12.9% ³² due to lower outsourced service expenses, particularly referral fees.

The company's capital allocation strategy involves funding capital expenditures and investment plans primarily through cash generated from operations and fundraising activities. Capital expenditures in 2025 totaled R$1.0 million ⁵⁷, with 90% ⁵⁸ allocated to hardware. The company believes existing resources and operating income will be sufficient for its capital expenditures and investment plan and to meet liquidity requirements. It also maintains a conservative risk management strategy, aiming to keep BR Partners Banco's Basel index above the 11% ⁴⁴ minimum requirement of the Brazilian Central Bank, with the index at 22.6% ⁴³ as of December 31, 2025.

Management explicitly flagged several structural headwinds and execution risks. Global economic slowdowns, influenced by factors like interest rates, credit availability, inflation, economic and political uncertainty, changes in laws, tariffs, trade barriers, and global conflicts, may adversely affect business performance. Significant market volatility can impact M&A transaction decisions and reduce the volume of securities offerings, M&A transactions, advisory fees, and other financial services. High interest rates and macroeconomic deterioration can increase risks in the corporate debt market, including default rates and renegotiations. Adverse fluctuations in financial markets can also affect the trading, volatility, and liquidity of securities, impacting wealth management and investment operations. The company is also exposed to risks associated with non-compliance with the General Personal Data Protection Law (LGPD) and potential fines of up to 2% ⁶³ of total revenue, up to R$50 million ⁶⁴ per offense.

Geographic, regulatory, and macro factors identified as constraints include the significant influence of the Brazilian government over the economy, which frequently intervenes and effects changes in policy, monetary, tax, credit, and tariff rules. Changes in interest rates, particularly the SELIC rate, materially affect the company's results, as a significant portion of its revenue, expenses, and liabilities are tied to these rates. Exchange rate instability may also adversely affect the Brazilian economy and the company. Furthermore, the financial services industry is subject to extensive regulation in Brazil and abroad, with potential for increased monitoring by authorities, leading to higher compliance costs and limitations on operations. Changes in tax and fiscal regimes, including recently enacted rules on dividend taxation and pending tax reform initiatives, may adversely affect the company and the markets in which it operates. For instance, Law No. 15,270/2025 introduced a 10% ⁶⁵ withholding income tax on dividends paid to non-residents as of January 1, 2026, and Complementary Law No. 224/2025 increased withholding income tax on interest on equity payments to non-resident shareholders to 17.5% ⁶⁶ or 25% ⁶⁷.

BR Partners faces material macroeconomic risks, including global economic slowdowns driven by interest rates, credit availability, inflation, and geopolitical conflicts such as the military conflicts between Russia and Ukraine and in the Middle East, which can reduce demand for products and services and impact client payment ability. Significant market volatility can considerably impact M&A transaction decisions and reduce the volume of securities offerings and advisory fees. High interest rates, such as the SELIC rate at 15.00% ⁶⁸ as of December 31, 2025, increase risks in the corporate debt market, including default rates, and can adversely affect treasury sales & structuring operations by leading to credit rating downgrades and increased margin calls. Competitive risks are high in the financial services industry, with local and international institutions competing on performance, innovation, reputation, and pricing, potentially leading to lower prices for BR Partners' services. Regulatory risks are substantial, as the financial services sector is subject to extensive regulation by Brazilian government agencies like the CMN, Brazilian Central Bank, and CVM, which can impose minimum capital requirements, credit limits, and other restrictions. Non-compliance with the General Personal Data Protection Law (LGPD) carries risks of fines up to 2% ⁶³ of total revenue, up to R$50 million ⁶⁴ per offense, and reputational damage. Operational risks include dependence on efficient information management systems, which are vulnerable to damage, interruptions, and cyberattacks, as evidenced by a significant cyber-attack in 2022. The company is also exposed to liquidity risks, with repurchase agreements totaling R$9,938.9 million ⁶⁹ as of December 31, 2025, and potential adverse effects from a downgrade in its credit ratings, such as BR Partners Banco's AA(bra) ⁷⁰ rating by Fitch Ratings and brAA ⁷¹ by S&P Global.

Management's overall tone emphasizes a client-centric business model and a strategic focus on leveraging interconnected business lines to create synergies and long-term relationships. They highlight the company's independence as a key competitive advantage, particularly in providing unbiased advice in restructuring services. Management acknowledges the challenging macroeconomic environment in 2025, characterized by higher interest rates and lower overall capital markets activity, which impacted M&A and capital markets revenues. However, they note the resilience of the investment banking and capital markets business line through diversified engagements and the continued development of the wealth management operations, which saw a 14.7% ⁵³ increase in Wealth under Advisory to R$5.9 billion ¹⁵ as of December 31, 2025. Strategic priorities include expanding wealth management services, investing in the digital platform to enhance client interaction and portfolio management, and maintaining a conservative risk management strategy, as evidenced by BR Partners Banco's Basel index of 22.6% ⁴³ well above the 11% ⁴⁴ minimum requirement. Management also notes the importance of their funding department's expertise in structuring various instruments and the company's local AA rating with Fitch Ratings and S&P for competitive funding costs and market access.