Brazil-based investment management company XP (XP) has bought a minority stake in Jive Investments. The completion of the deal is dependent on the approval of the CADE (Administrative Council for Economic Defense).
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Jive offers credit recovery, real estate, and other distressed asset strategies in Brazil. It currently manages about R$8 billion in assets.
As per the terms, the governance and independence of each company will not be affected by this deal.
The deal marks another step in XP’s efforts to stimulate independent asset managers in Brazil within an entrepreneur-friendly ecosystem. Also, the move will help improve liquidity in the secondary market. (See XP stock chart on TipRanks)
“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,” said Partner at XP, Leon Goldberg.
Last month, Credit Suisse analyst Marcelo Telles upgraded the stock’s rating to Hold from Sell and raised the price target to $43 from $40. The price target implies 4.3% downside potential from current levels.
Telles remains cautious of a largely competitive environment, ‘hawkish’ interest rate environment, and a potential overhang from Itau Unibanco’s 40% stake spinoff.
Based on the 1 Buy, 3 Holds, and 1 Sell, the stock has a Hold consensus rating. The average XP price target of $47.75 implies 6.3% upside potential from current levels. Shares have gained 14.5% so far this year.
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