BTG Pactual goes public: Back to basics WALL STREET elders talk nostalgically about the days of private partnerships, before investment banks went public. BTG Pactual, a Brazilian investment bank that raised 3.7 billion reais ($1.9 billion) in an initial public offering (IPO) on April 24th, thinks it can have the best of both worlds. Although the IPO will enable some investors, like J.C. Flowers & Co, a private-equity firm, to cash out at a handsome profit, the bank's partners have less freedom. BTG does not want to go public only to see partners chase Ferraris, third homes and early retirement by taking unnecessary risks in order to plump the share price. So it has put severe restrictions on partners selling shares. Partners who want to leave the bank or cash out will be allowed to sell their shares only to other partners, and only at book value. In this way the bank's culture will not be corrupted by going public, the thinking goes, and shareholders can be reassured that partners will stay for the long term. Some partners are said to be grumbling about the scheme. They will not be able to sell shares at the market price even after they have put in decades of work and want to retire. That raises questions about whether partners are genuinely incentivised to do well by shareholders. And even if the bank's pay policies please the purists, BTG's governance structure will not. André Esteves, the bank's high-voltage billionaire founder, will control around 85% of the bank's common shares and has "sole discretion" to control the bank's policies and management, even when a matter has been put to shareholders. Mr Esteves has ambitions for BTG to become the dominant investment bank in all of Latin America. The bank, like Brazil itself, has had a growth spurt in the past few years, forging into new business lines and countries through a spate of acquisitions. A week before the IPO Mr Esteves was fined €350,000 ($457,000) for insider trading by Consob, the Italian regulator, which said he bought shares in an Italian meat company in 2007 before a joint venture with JBS, a Brazilian firm, was publicly announced. Mr Esteves denies the allegations. Investors shrugged: the IPO was said to be three times oversubscribed. They are too keen to buy into Mr Esteves to be put off by the controversy, or by any disgruntlement on the part of his colleagues.