For ADEPA, European fund services firm, Latin America is at the heart of its internationalization strategy and the gateway is Chile, where it recently announced the purchase of services firm Planes.
Now, with one foot in Santiago, the firm’s CEO, Carlos Alberto Morales, reveals that ADEPA aims to conquer the mature local asset management industry with two businesses: back-office outsourcing and a platform that is able to launch its own vehicles in Luxembourg.
In an interview with Funds Society, the executive explains that they are currently in the process of integrating the structure of Planes with that of ADEPA at a global level -the firm has operations in Luxembourg, Spain and Italy- in order to launch what they call a NAV Center in Chile. This hub, he explains, will operate with the firm’s international standards and will be in charge of calculating the funds’ quota values. For the medium term, the star products will be its trading services and the international platform.
Two pillars
“We are talking about a dual strategy: giving local and also international support. That is our strategy for Chile,” says Morales. On the back-office services side, ADEPA’s CEO sees great potential for growth, considering that outsourcing this area is not a frequent practice in the Andean country.
Morales believes that the firm is distinguished by the fact that it offers a service that brings together all the functions -such as operations, reporting and calculation of quota value- which allows fund managers to concentrate on their core business: asset management. Along these lines, he assures that the benefits for fund managers include economy of scale, reduction of operating risks, improvement of corporate governance practices, and optimization and cost structure, converting a fixed cost into a variable cost.
On the international funds side, ADEPA offers investment managers to develop their European business, launching through the firm’s SICAV structure its own funds in Luxembourg, with the European firm taking care of the operational side, legal responsibility and representation before the funds’ regulators. In that sense, the company identifies the growing interest of Chilean investors in offshore products as a potential boost for the business. “We are seeing a continuous launch of European products, especially in Luxembourg, from AGFs in Chile, and our role is very important there,” says Morales.
Latin American expansion
“Latin America is a key part of our strategic development for the coming years,” says ADEPA’s CEO. For them, Chile is just the starting point, selected for the maturity of its fund industry. The European firm thinks that the attractiveness of the region comes from the evolution they are seeing in the region’s fund industries, at different levels. In addition to this, there is a growing interest in Luxembourg as an international platform, which is in line with ADEPA’s international experience.
Morales emphasizes that, in addition, this is a region in which the fund administration services industry, the niche in which they participate, is underdeveloped, especially by large international groups. Regarding the company’s next step in Latin America, he highlights that they are sounding out different markets, focusing mainly on the countries of the Pacific Alliance.
Although nothing has been defined, the CEO believes that the next destination could be Mexico. This country, he says, “has similar characteristics in terms of local fund industry and interest in international products”.
Por Javiera Donoso
