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In the year 2010, BB Gestão de Recursos – BB DTVM, the largest manager of third-party assets in the Country, reached the figure of R$360.2 billion in assets under management, divided into investment funds and managed portfolios. This volume represented an increase of 17.4% over 12 months, according to Anbima, the Brazilian Association of Financial and Capital Market Entities.

It should be pointed out that these figures do not include the balance of funds managed by Banco Votorantim, which amounted to R$24.1 billion at the end of December 2010. If we were to consolidate 50% of the balance managed by BV, the percentage equal to BB's stake in the company's capital, then Banco do Brasil's market share in this segment would be 21.9%.

In addition to not acquiring stakes in companies that disrespect principles related to environmental preservation, human rights and labour rights, BB DTVM, a wholly owned subsidiary of Banco do Brasil, has become a signatory of the Principles for Responsible Investment – PRI, a United Nations initiative, committing itself to adopt socio-environmental variables in its investment decisions. BB DTVM adhered to the responsible investment principles in 2010. In this way, analysis and decision-making on investments incorporates socio-environmental and corporate governance criteria. In addition to this initiative BB invests in funds that prioritise sustainability, such as FIP Brasil Governança, BB Referenciado DI Social 50, which in 2010 passed on about R$827,000 to products of the Banco do Brasil Foundation, and BB Ações ISE.


Investment Funds with Socio-environmental Characteristics

 

Banco do Brasil offers its clients two alternative investment funds that adopt Socio-Environmentalcriteria, and four investment funds that invest in equity stakes. According to the International Finance Corporation (IFC), the business arm of the World Bank, investment which takes into consideration social and environmental criteria – Socially Responsible Investment (ISR) – have accumulated a global capital of more than US$2.0 trillion, principally in developed countries.


Product or Service Socio-environmental Responsibility
Characteristic
Shareholder Equity in 2010 (R$ thousand) Share in the Total Portfolio Profitabililty in 2010 (%)1 Characteristics of Products
Environmental Social
BB Referenciado DI Social 50 50% of the management fee is passed on to the Banco do Brasil Foundation. 38,400 0.010 6.10%   X
BB Ações ISE Theoretical portfolio of ISE – index consisting of shares in companies that display a wide ranging corporate responsibility, considering aspects of corporate governance, economic efficiency and environmental equilibrium and social justice. As a socio-environmental characteristic, the regulation of the fund makes provision that companies invested in must obligatorily adopt socio-environmental responsibility standards (seeking to minimise possible adverse effects on the environment from their activities) and adopt good corporate governance practices. 23,200 0.006 7.97% X  

(1) In the case of funds that invest in equity stakes, the return during the first few years is normally negative, which is explained by the payment of administration fees and other appropriate expenses, in addition to the fact that the assets are acquired gradually, and need to mature in order to generate earnings, either through the payment of dividends or interest on equity, or through capital gain as a result of divestment.


Investment funds in Equity Stakes (FIP) with Socio-environmental Characteristics
 

Product or Service Socio-environmental Responsibility Characteristic Shareholder Equity in 2010 (R$ thousand) Profitabililty in 2010 (%)1 Characteristics of Products
Environmental Social
FIP Brasil Governança Corporativa Structuring of fund focused on the acquisition of stakes in companies that can be taken to the global corporate governance stage (pre-IPO), with solid management fundamentals, willing to strengthen corporate governance practices and apply the concepts of self sustainability, with maturity in the managing of conflicts of interest and treatment of socio-environmental issues. The rules of the fund cite that companies invested in must obligatorily adopt standards of socio-environmental responsibility (seeking to minimize the possible adverse effects on the environment from its activities and adopt good corporate governance practices. 340,592 7.40%   X
Brazil Sustentabilidade FIP(1) Structuring of the fund focused on the acquisition of stakes in companies whose activities are associated with projects with the potential to generate carbon credits, with the incorporation of the principles of sustainability in investment decision-making. With socio-environmental characteristics, the regulation of the fund cites that companies invested in must obligatory adopt standards of socio-environmental responsibility (seeking to minimize the possible adverse effects on the environment from its activities) and adopt good corporate governance practices. 6,394 (48.14%) X X
Brazil Agronegócios FIP(1) Structuring of the fund focused on the acquisition of stakes in Brazilian companies in which had been identified solid fundamentals of value, which can benefit from capital injections, with the objective of taking them to the capital markets. The focus of investment of the fund covers the entire agribusiness production chain, from the supplier inputs, to processing and distribution. As a socio-environmental characteristic, the regulations of the fund cite that companies invested in must obligatory adopt standards of socio-environmental responsibility (seeking to minimize the possible adverse effects on the environment from its activities) and adopt good corporate governance practices. 34,401 (18.09%) X X
Fundo Brasil de Internacionalização Empresas FIP (1) Structuring of the fund (FIP) focused on the acquisition of stakes in medium-size Brazilian companies already carrying out foreign trade, or that have the potential to be internationalised. Eg.: sectors with a high aggregate value, leading companies in national sectors and sectors in which Brazil is competitive. With a socio-environmental characteristic, the regulations of the fund cite that companies invested in must obligatory adopt standards of socio-environmental responsibility (seeking to minimize the possible adverse effects on the environment from its activities) and adopt good corporate governance practices. 42,859 (8.84%)   X

(1) In the case of funds that invest in equity stakes (FIP), the return during the first few years is normally negative, which is explained by the payment of administration fees and other appropriate expenses, in addition to the fact that the assets are acquired gradually, and need to mature in order to generate earnings, either through the payment of dividends or interest on equity, or through capital gain as a result of divestment.


BB Ações ISE


Launched in December 2005, BB Ações Índice de Sustentabilidade Empresarial (equity corporate sustainability index) is Banco do Brasil's first ethical fund, and the first fund in Brazil to be referenced to the São Paulo Stock Exchange Corporate Sustainability Index (ISE). The ISE index is composed of companies that include social and environmental issues in their business and management practices. Ethical funds stimulate companies to invest in socio-environmental sustainability in their businesses, and encourage investors to value companies that seek to reduce impacts.


BB DI Social 50
 

BB Referenciado DI Social 50 is an investment fund of BB with socio-environmental attributes which passes 50% of its management fee onto the Fome Zero (zero hunger) Program – since 2003 this fund has passed on more than R$8.2 million to various projects that are part of the Federal Government Fome Zero Program, run by the Banco do Brasil Foundation.

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