Over 2000 people gathered in Atibaia during the 24th, 25th, and 26th of June to attend XP Investimentos’ sixth national convention, one of the largest events held in Latin America for investment professionals. The Expert 2016 event was attended by such international fund management companies with a local presence as Franklin Templeton, BlackRock, JP Morgan AM, BNP Paribas AM, Deutsche Bank, BNY Mellon, and Mirae Assets; local fund managers with a prominent role in Brazilian and Latin American markets such as the Group’s own fund manager, XP Gestão de Recursos, thefund management companies within the Azimut Group, Questy AZ and AZ Legan, BTG Pactual, Bozano Investimentos, Votorantim Asset, and Valora Gestão de Investimentos, amongst others. In addition, banks and insurance companies such as Porto Seguro, Prudential, Sulamérica Investimentos, and Icatú Seguros, as well as the fund distributor and custodian platform, Allfunds Bank, also participated.
During this financial industry trade fair, there was also time for conferences, training sessions and presentation of awards. The event kicked off with a welcome to all attendees by Guilherme Benchimol, XP Investimentos President and Founding Partner of XP Group. Benchimol recalled the company’s beginnings, reviewing its development from the outset. Gabriel Leal, a partner at XP Group and the company’s Retail Business Director, spoke about the current situation in the markets and the future of XP Group.
Next, Abilio Diniz, current President of the Board of Directors at Península Participaçoes, spoke about the challenges currently faced by Brazil. Diniz recommended trying to understand the country’s current crisis by using the example of the ideograms that make up the word “crisis” in Mandarin Chinese: “danger” and “opportunity”. Thus, he informed of the need for: survival spirit, monitoring costs closely, assessing the crisis as a whole, avoiding to blame the crisis, looking in the mirror rather than out of the window, and anticipating, all in order to exit the crisis stronger. Abilio Diniz, who along with his father Valentim, was responsible for developing one of the country’s largest retail distribution networks, Grupo Pão de Açúcar, is also Chairman of the Board at BRF, and member of the board of directors for the Carrefour Group in Brazil.
Later, Martin Escobari, entrepreneurial and private equity investor partner in charge of General Atlantic’s operations in Latin America, shared his three rules for investing even in times of low visibility. For Escobari, the first rule is to look to the future, something relatively easy to do in markets such as Brazil which, to a certain extent, lag behind more developed markets. As an example, he mentioned the mutual funds retail distribution market in the US during the seventies, in which 80% of the funds were distributed through banks and 20% by independent firms, and its evolution to the present, in which 98% of investment funds are distributed by independent entities; while the Brazilian funds’ distribution market is almost entirely in the hands of banks, which portends a trend in the migration of savings towards independent channels. As a second rule, he recommended reacting quickly to market conditions, and finally, as a third rule, looking for resistance by investing in companies that do not depend on the country’s situation.
During his presentation, José Gallo, Director and President at Lojas Renner, spoke of the need to ‘enchant’ the client, the importance of developing an emotional attachment to the construction of a brand, and simplifying the management process as much as possible.
Finally, one of the most exciting moments of the day was when the audience stood to welcome the ‘Eternal President’, Fernando Henrique Cardoso, President of Brazil for two consecutive terms, from 1995 to 2003. Cardoso gave an overview of the extremism currently present in global politics, with the very recent Brexit results and the US presidential elections before the end of the year. With regard to the economic crisis currently faced by Latin America’s largest economy, Cardoso referred to the years of the global financial crisis and the performance of the financial team under Lula’s government, during which there was an increase in public spending, credit, and consumption, without an increase in investment, which in his opinion is a “Recipe for Disaster.” The former president also spoke of the need to reform the Brazilian political system, in which the more than 30 parties participating in Congress prevent setting a course for implementing the political agenda, he therefore commented on the need to return from cohabitation presidentialism to coalition presidentialism. As for the future of Brazil, Cardoso believes that the country reached a turning point where the Lava-Jato operation was a necessary and positive step for advancement. His only fear is the possible emergence of “backward” political demagogues who do not culturally perceive the need for what needs to be done. At the economic level, he trusts the dynamism of Brazilian industry and agriculture as a force to recover the path to growth. When asked if he would be willing to return to the forefront of politics, the former president’s felt honored by the request, but declined politely, joking that at 85 years of age, a return to politics would shorten his life significantly.