Benzinga | Jun 28, 2021 09:51AM EDT

XP Late Friday Announced Partnership With Jive

XP Inc. (NASDAQ:XP), a leading, technology-driven platform and a trusted provider of low-fee financial products and services in Brazil, signed yesterday the acquisition of a minority stake in Jive Investments, the largest independent alternative investment manager in Brazil, offering credit recovery, real estate, and other distressed asset strategies. XP's investment will allow Jive to accelerate its growth, while the partnership represents another step in XP's initiative to foster independent asset managers in Brazil within an entrepreneur-friendly ecosystem.

Additionally, the development of independent asset managers meets XP's strategy by contributing to an increase in secondary market liquidity. Higher liquidity is vital when we think about the disintermediation in the credit industry through capital markets.

Currently, Jive manages approximately R$8 billion in assets, R$21 billion in face value with more than 1,300 investors in Brazil and abroad. The partnership will allow the company to originate and distribute assets directly or through approximately 9,000 IFAs plugged into XP's network.

One of Jive's strategic initiatives is to enter the retail channel. "Our initial focus was investing in highly complex assets for institutional investors. Now, we are extending our investment offerings into products with lower risk and complexity profiles, which are more appropriate for a wider audience," commented Guilherme Ferreira, partner at Jive. "Our plans include stepped up investments in technology, expanding origination and distribution channels, strengthening the team, and capitalizing on opportunities to acquire other managers and platforms that are complementary to our business.

"Jive is a leading player in alternative investments in Brazil. Our vision is to offer our clients a complete investment ecosystem through partnerships with the best managers in the market, such as Jive," stated Leon Goldberg, partner at XP Inc.

Initial product development initiatives will be focused on high yield credit, real estate, and legal assets. More broadly, Jive plans to offer a more complete and integrated investment platform in alternative and illiquid assets, with differentiated products for investors. Moreover, management is planning on expanding the company's offering of asset management, collection, and recovery services to third parties, including banks, pension funds and large companies.

The governance and independence of each company will remain unchanged.

The closing of the transaction is dependent on the approval of Cade (Administrative Council for Economic Defense).