UBS has bought Banco Pactual, one of Brazil’s leading financial services firms. The Swiss bank will pay $1 billion upfront and as much as a further $1.6 billion in five years, subject to performance conditions. In addition, UBS will establish a retention pool of up to $500 million in UBS shares for Pactual and UBS employees payable beginning on the fifth anniversary of closing. Pactual has a highly successful proprietary trading desk, a strong franchise in equity capital markets and a sizeable asset management business. Earlier this year it broke off negotiations over a possible joint venture with Goldman Sachs.