Brazil Offers Opportunities and Risks For Wall Streeters On the Move

New opportunities are springing up for bankers and other investment professionals in Brazil, where pay has begun to rival and sometimes even surpass Wall Street's.

Many Brazilians have begun moving back to their native country due to the finance industry surge and because life can be cheaper in Sao Paulo than New York, says a portfolio manager specializing in emerging markets in Latin America.

The area is rich with opportunism for people with MBAs, Certified Financial Analyst designations, experienced investment bankers and other service professionals in fields like engineering.

And yet, not everyone has what it takes to make it in Sao Paulo.

"There's been a lot of hiring, but not a whole lot of people who can fill the vacancies that exist," Francisco Alzuru, co-portfolio manager of the Hansberger Emerging Markets Fund and its managing director of emerging markets research, tells eFinancialCareers.

What it takes to make it in Sao Paulo

It's no secret that Brazil's attractiveness as a finance haven has been growing of late. The New York Times reported last week that "a surge in deal making and the resilience of the real has attracted foreign investment bankers, hedge fund managers and venture capitalists," and that "Compensation in some executive suites now rivals the pay on Wall Street."

The piece referred to Sao Paulo as "a drizzle-shrouded megacity of almost 20 million that sprawls like Los Angeles and boasts enough skyscrapers to vie with New York."

Investment banks have been turning to emerging markets seeking growth they can't find elsewhere.

Goldman Sachs increasing Brazil workforce

Goldman Sachs, for one, reported last summer that it was increasing its Brazil workforce by about 20 percent this year to expand in an economy that's growing more than twice as fast as the company's home market. After expanding 7.5 percent last year, Brazil's economy is expected to grow 4 percent this year. The unemployment rate in Brazil had dipped to just 6 percent as of August 2011.

Goldman's Brazilian unit, which has raised headcount to about 300 from 200 last year, plans to invest this year in research, asset management, private banking, sales, investment banking and trading, according to the group's president, Valentino D. Carlotti. "We have robust growth plans for every product and division," Bloomberg quoted Carlotti saying this past summer.

Pros and Cons

Yet there are some major hurdles for Americans considering a move to Latin America. "One is the language," says Alzuru. "If you don't speak Portuguese, you won't do a whole lot of business in Brazil," and if you don't speak Spanish, it's the same in Santiago, Chile and Mexico, he observes.

On the upside, "It's as close to full employment as you can get," says Alzuru.

A high-end luxury apartment could conceivably be pricier in Sao Paulo than New York, but not necessarily, and Alzuru says that life tends to be "more affordable and more livable" than for Wall Streeters. "There is more than one financial center," in which to find housing, for instance. Brazil has no state tax, and personal taxes are lower. It might be more expensive to purchase an automobile, but more importantly for would-be citizens, Alzuru says, Sao Paulo can be a dangerous place to live.

The Times reports that "One aesthetic that hasn't changed much in the latest boom involves security. While Sao Paulo's once-horrific homicide rate has declined, crime-robberies and home invasions-remains a preoccupation. Guarding those elegant mansions in Jardim Europa are towering walls with gunmen at their sentry posts."

"In the middle of the day, you can walk around" freely, Alzuru says, observing that "a young mother can walk her kids to school," for instance, but she'd need to think twice once the sun goes down.

"Anyone with any real wealth is a crime target. It's not like Greenwich, Connecticut, where you have people with so many levels of wealth," Alzuru said.