FINANCIER: PAULO FERRAZ (int'l edition) As risks of doing business in Latin America rise and as demand for services such as bond underwriting and stock issues shrinks, foreign investment banks may scale back operations in Brazil. And Paulo Ferraz aims to pick up business foreigners leave behind. ''How many foreign investment bankers will stay committed after the first pains?'' demands the CEO of Bozano Simonsen, the leading Brazilian-owned investment bank. ''Most are trying to convince their bosses that Brazil hasn't disappeared.'' For Ferraz, wariness spells opportunity. And the 45-year-old financier has become expert at taking advantage of local breaks--especially from Brazil's privatizations. Bozano Simonsen has participated in 30 deals as an adviser, 20 as a broker, and 7 as a trader. Bozano Simonsen Group, the bank's parent, has bought stakes in companies from aircraft maker Embraer to retail bank Meridional. When the group, owned by Julio Bozano, acquired Meridional last December, Ferraz became CEO of his second bank. With 225 branches, Meridional has been a rival in Southern Brazil to giants Bradesco and Banco Itau--but lost money. Within months, Ferraz reduced payroll from 7,000 to 4,000 through voluntary retirement--and broke even. Some critics believe Ferraz is stretching himself too thin by running both an investment bank and a retail bank. In mergers and acquisitions, it will be tough to compete against a Merrill Lynch or J.P. Morgan. In fact, Bozano Simonsen is increasingly seen as a buyout target for foreign banks that ride out the crisis. But Ferraz contends that Bozano Simonsen will survive precisely because it offers a range of products. While investment banking will decline because of the crisis, he argues, so will competition. And fees, which had dropped to record lows, will rise. That will make the business ''feasible for the fewer banks that stay around,'' he says. Ferraz, a Harvard MBA who joined the group in 1982, thinks Brazil's big companies will continue to need credit, even as the economy stumbles and hurts smaller businesses. So while activities such as trading, asset management, and debt placement suffer, he plans to compete with foreigners in commercial lending. With a shakeout in investment banking on the horizon, it's sure to be a rough-and-tumble battle for business. Return to main story

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