Invesco is driving its business in the Americas through two levers: a new structure and a strategic agreement with LarrainVial. Currently, the firm oversees $35 billion across the US Offshore and LatAm markets, with Íñigo Escudero, Head of Southern Europe & Latin America at Invesco, as its key figure in the region.
Initially, the firm managed the US Offshore and LatAm markets separately, but after expanding his responsibilities and being appointed head of the Southern Europe business as well, Escudero made a significant decision: to merge both regions. “It was a decision that made sense because the link between both markets is enormous. In US Offshore we have been operating for more than fifteen years and benefit from the great work that Rhett Baughan, Head of US Offshore Distribution at Invesco, has been doing. There, we have grown considerably over the past five years and have around $6 billion in US Liquidity, which possibly makes us the largest international asset manager in liquidity. For LatAm, we have Begoña Gómez, who until now was responsible for LatAm for Active, and will now also take on the US Offshore segment; as a result, Baughan will report directly to her. Finally, for the ETF segment, Laure Peyranne, Head of ETFs for Iberia, Latin America, and US Offshore, will continue to lead the business,” explains Escudero.
To understand this structural change at Invesco, it is necessary to consider its second growth lever: the expansion of its strategic agreement with LarrainVial. For more than 18 years, Invesco has collaborated with the Chilean asset manager on distribution throughout Latin America. Until last year, the agreement with LarrainVial included $9.2 billion in UCITS mutual funds and $15.6 billion in Invesco ETFs, but with the expansion of their alliance into the US Offshore channel for Invesco’s UCITS products, the growth potential is much greater.
“Many firms approached us to work together and grow in the US Offshore market, but we felt it was not yet the right time for us. However, following our growth in recent years and LarrainVial’s evolution, we saw that now was the ideal moment to expand our collaboration for several reasons: their expertise, their team of professionals, and our relationship of nearly twenty years,” Escudero highlights.
A structure for growth
These two decisions have resulted in a clear structure ready to generate growth across both active and passive segments. As Escudero clarifies, “Rhett will primarily be responsible for relationships with platforms in the US Offshore market; that is, he will focus on where fund selection decisions are made and will work to ensure that as many Invesco funds as possible are included on key lists. His work is complemented by that of LarrainVial, whose extensive experience and network will help us ‘unlock’ and deliver products to investors.”
The firm recognizes that the growth potential is greater in the US Offshore market, which—like the Latin American market—is expected to grow at faster rates than the rest of EMEA markets. “When discussing growth, it is important to note that US Offshore and LatAm are somewhat different markets,” Escudero explains: “As we are structured, LatAm is primarily institutional clients—pension funds, central banks, and authorities—while only 10% is represented by private banks and family offices. With our expanded distribution agreement with LarrainVial, we believe this will change and that we will be able to achieve significant growth in the family office and private banking segment. Moreover, many family offices also have a presence in US Offshore; and this is another segment where we want to grow. This growth would also bring significant business diversification, which is another of our objectives.”
The firm sees a significant growth opportunity in this segment, especially considering that the family office industry in Latin America is approaching $100 billion, of which more than 55% is invested in US Offshore products. “We are talking about between $55 billion and $60 billion in business. The nuance is that each country is different and has a distinct configuration, which is why local knowledge is so important. For example, in Mexico, 90% of US Offshore investments are in ETFs, whereas in Chile ETFs represent only 30%, in Colombia 10%, and in Peru 25%,” Escudero notes.
Regarding growth targets, Escudero avoids giving a specific figure but acknowledges that their outlook for LatAm and US Offshore is to grow “at higher rates than other similarly mature markets, such as Spain or Italy.” He adds: “For US Offshore, we aim to at least double assets over a five-year period.”
From advisory to the investor
Given the firm’s broad product range, the mantra for this growth, according to Escudero, will be “to continue offering the investment solution that best fits each investor, market, and country.” As he acknowledges, advisors are the key piece in aligning these investment solutions: “Unlike what we see in other European regions, in the Americas the decision about fund selection lies with private bankers, which requires a very strong and close commercial network.”
As for investor demand, he believes that despite trends, the essence has changed little. “We are dealing with clients who have fairly diversified portfolios and who quite like multi-asset funds, such as our Global Income strategy. Sometimes they prefer to build their own mix and combine fixed income and equity funds in their portfolios, or opt for model portfolios (MPS), which have recently become popular,” he notes.
Among the trends he observes in this market, Escudero highlights generational change. According to his experience, “new generations demand new communication channels, but they remain traditional investors who seek returns and security for their capital.”
