Last updated: 09:11 / Friday, 22 January 2016
US$ 56 Billions in Assets

U.S. Offshore Segment Accounts for More Than Half of Cross-Border AUM

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U.S. Offshore Segment Accounts for More Than Half of Cross-Border AUM
  • The U.S. offshore, Latin American offshore, and Latin American onshore markets are the three channels of the wealth management market in Latin America
  • The three asset-gathering segments stands at US$ 105 billion, with the U.S. offshore segment accounting for more than half of the total at US$ 56 billion in assets
  • Asset managers should remain focused on serving clients in key locales such as Miami, which is bustling with activity

According to the latest research from global analytics firm Cerulli Associates, the U.S. offshore channel accounts for more than half of the assets raised by cross-border managers in the Latin American region. These findings and more are from Latin American Asset-Gathering Strategies 2016: Cross-Border Distribution to High-Net-Worth and Pension Markets, a newly released report developed in partnership between

Cerulli and Latin Asset Management.

Cerulli and Latin Asset Management consider the wealth management market in Latin America to consist of three channels: The U.S. offshore, Latin American offshore, and Latin American onshore markets. The U.S. offshore market mainly consists of distributors based in financial hubs of South Florida (mostly Miami and Coral Gables), Texas (mostly Houston and San Antonio), New York, and Southern California (mostly San Diego).

"According to our estimates, the overall size of the three asset-gathering segments stands at US$ 105 billion, with the U.S. offshore segment accounting for more than half of the total at US$ 56 billion," states Thomas V. Ciampi, founder and director of Latin Asset Management.

"A factor that differentiates the market in Latin America is the perceived risk of the home country, in terms of political risk, personal security, and stability of markets and currencies," explains Ciampi. "For residents of countries who are passing through difficult times, or have volatile leadership unfriendly to foreign companies, such as Argentina or Venezuela, investors are of course eager to shelter their assets from the local banking system. In countries such as Mexico, Chile, Colombia, and (up until recently) Brazil, the wealthy may seek to have some of their savings offshore, but are still comfortable putting their money to work in the local economy or saving in locally domiciled financial instruments."

Although the U.S. offshore market accounts for half of the assets under management, the Latin American offshore market is growing for a host of reasons. Among them are: sophisticated distribution tactics, enhanced technology offerings of product services, greater client trust in local advisors, and changes in the profile of the typical wealthy investor residing in the region.

Asset gathering from within Latin America has become more critical in recent years and this local growth has come at the expense of U.S. offshore booking centers such as South Florida, Texas, and New York. However, the importance of maintaining a presence in the U.S. offshore market should not be discounted. Asset managers should remain focused on serving clients in key locales such as Miami, which is bustling with activity.

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