Q&A session with Gustavo Lozano, managing director of Pioneer Investments in Mexico, after Afore Sura announced its decision to give Pioneer Investments a mandate to manage an international equity portfolio.
What does Afore Sura mandate mean for the Pioneer Investments group of companies?
Being selected to manage an international equity investment portfolio for Sura is a direct result and materialization of efforts dating back a couple of years, when it was decided (for Pioneer Investments) to invest and expand into emerging markets as a keystrategy for the group. The increasing role of these countries, their expanding middle class, internal savings and economic stability have been determinant factors that underscore Pioneer Investments view.
Pioneer Investments recently opened an office in Mexico which is one of the key initiatives of its growth strategy, and this new and early opportunity with Sura speaks volumes in terms of the ability of the group to offer a viable, original and competitive strategy to Sura. Pioneer Investments’ track record in the industry, team approachand cohesion were very important factors that Sura valued. The group’s history and experience of over 85 years enables it to enrich the relationship with Sura through cooperation that will solidify and help in the local asset management industry development.
Will Pioneer Investments’ strategy and bet change in Mexico now?
No, quite the contrary. This event underscores that we are on the correct path into the solidification of our expansion into emerging markets and most particular throughout Latin America. Our aim would be to connect the capabilities in investment management Pioneer Investments has across a range of strategies with Mexican institutional clients who demand those products.
How do you think this mandate will affect? Will it change the setting of the different market players?
Every time there is a new asset class incorporated to any investment regime, it takes time to close and execute the first deals. We think this new deal will serve as a catalyst for others to join.
Speaking about institutional asset managers, the need to externalize investments that target other geographies is general. There’s no human capacity that can cover all investment regions and classes, but the need to diversify will grow.
Also we are going through very particular times in which liquidity is seeking options to recover income potential, causing the review of investment strategies. We believe that pensions will need to bring to their clients diversification options as a strategic part of their portfolio. This is particularly important in Mexico’s market as holdings are growing at a 16% YoY pace that markets can’t keep up with, so we will see a growing need to export savings just as it happened in other countries before.
With the mandate in the group’s hands, does the group intend to compete for others?
Certainly, our project in Mexico is a long term commitment. The group is looking forward to bringing its experience and strengths to Mexico’s institutional client base. We believe that we have an excellent investment process and high quality institutional strategies that are well suited for the market here. Having a local presence is proof of our resolve.
Investment needs call for diversification. We see growing savings creation in the country. We are sure more clients, not necessarily from the pension management side but also others in the asset management arena, will open their architectures and will bring to their clients the best of their administration along with the best of the international managersworld.
We believe that Pioneer Investments will be a solid front runner competitor.