Deal that gave PVBI11 full ownership of Faria Lima 4440 faces CVM investigation
- The fund exercised its right of first refusal, directly acquired 0.5% of the building and consolidated the remaining 49.5% through a fund vehicle
The transaction that allowed PVBI11 to consolidate its ownership of Faria Lima 4440 has become the subject of an administrative enforcement proceeding before Brazil’s Securities and Exchange Commission (CVM), as first reported by O Globo.
The allegations involve Patria, the fund’s asset manager, its fiduciary administrator, as well as current and former executives. The proceeding is not public, and the conduct attributed to each defendant remains unknown.
However, PVBI11’s documents make it possible to reconstruct the transaction. The fund already owned 50% of Faria Lima 4440 when the other half was put up for sale in 2023.
As a co-owner, PVBI11 exercised its right of first refusal. The acquisition was split into two parts: the fund directly acquired only 0.5% of the building, increasing its stake to 50.5%, while the remaining 49.5% was acquired by the FLFL fund vehicle.
In 2024, after raising BRL 749.7 million through its sixth offering, PVBI11 acquired 1,401,500 FLFL units for BRL 194.8 million. Since it already held another 50,000 units, PVBI11 became the vehicle’s sole unitholder and gained indirect control over the entire building.
The structure also carried approximately BRL 267.5 million in debt. According to the rationale disclosed by the asset manager, the total cost of the acquisition through the FLFL units amounted to BRL 457.2 million.
The asset manager estimated that a direct real estate acquisition would have cost BRL 462.2 million. Using the fund vehicle would therefore have generated savings of approximately BRL 5 million, or 1.1%, mainly through lower taxes and registration expenses.
What may have happened?
The investigation centers on the fact that PVBI11 exercised a right granted to it as a co-owner but directly acquired only 0.5% of the property. Most of the stake was initially acquired by another vehicle.
One hypothesis raised by market participants is that the CVM may be questioning how the right of first refusal was exercised.
At the time of the 0.5% acquisition, another major player was interested in Faria Lima 4440. Unlike PVBI11, this company had the funds available to invest in the property. The FII therefore acquired only a minimal stake, effectively blocking the transaction.
This maneuver gave Patria time to secure the necessary funding. One year later, it used another fund to acquire the remaining 49.5% stake. This structure is now under investigation by the CVM.
The documents confirm that the acquisition was divided in this manner, but they do not prove that the right of first refusal was improperly assigned or that this forms the basis of the allegations. The answer depends on the contents of the proceeding and the agreements signed in 2023.
What does Patria say?
When contacted, Patria stated that it “has not yet been granted access to the contents of the proceeding in question. The asset manager reiterates that it operates transparently and always in the best interests of the unitholders of the funds under its management, in strict compliance with applicable laws and regulations.”
In addition to the proceeding, PVBI11 is facing operational pressure. In June 2026, its physical vacancy rate reached 19%, while the asset manager projected distributions of approximately BRL 0.37 per unit for the following six months. There is no known connection between the vacancy rate and the CVM proceeding.
