Last updated: 10:00 / Tuesday, 4 February 2014

Afore XXI Banorte Has Awarded Schroders and BlackRock Each with a Mandate

Afore XXI Banorte Has Awarded Schroders and BlackRock Each with a Mandate

In an exclusive interview with the newspaper, El Financiero, picked up by Funds Society, Ignacio Saldaña Paz, CIO of Afore XXI Banorte, confirmed that they are preparing to award Schroders and BlackRock with two mandates worth almost 9,632 million pesos.

Last summer the afore launched two calls: one for equity and one for commodities. The decision was not an easy one for the afore’s financial director. “All the bids were highly competitive and it was very difficult to make a final decision, but ultimately, the determination was reached based on size, global relation, and experience.”

Saldaña explained that these management companies shall receive 1.75% of the assets under management, which according to Consar’s December figures amount to 9.632 million pesos ($ 725 million). As for the election process, the executive concluded that they decided to concentrate on two management companies, two contracts, and start off from there.

Meanwhile, and after hearing the news, Javier Orvañanos, CIO of Afore Banamex, which was the first afore to award mandates, told Funds Society that “Schroders and BlackRock are good managers. Workers affiliated to Afore Banamex have been successful investing through these industry leaders.” In this regard, BlackRock‘s Samantha Ricciardi pointed out to Funds Society “We are very excited to have participated in another afore’s selection process.”

Analyzing the Calls in Commodities

With the equity mandates already awarded, the afore is now analyzing the calls for commodities and in March they will disclose the names of the winning bidders, who will receive up to 3% of assets, which amounts to 16,513 million pesos (about 1,242 million dollars).

Saldaña added that Afore XXI Banorte must now continue with the regulatory process to finalize the contracts and accomplish their funding. The executive expects to deliver the resources by midyear.

In turn, Consar’s president, Carlos Ramírez Fuentes, referred to the mandates awarded as a positive step because it “allows the afores greater diversification for workers’ savings, and naturally, in an environment like the current financial market, diversification is absolutely necessary, and this is the vehicle which will help to make this happen. We already have the experience of the first mandate, which I believe has had favorable results in terms of diversification. I welcome the fact that other afores are looking to use this vehicle.”

Meanwhile, Javier Orvañanos, CIO for Afore Banamex, the only Afore which has funded a mandate, points out that it is their pleasure to have led the way to a method which will benefit workers by allowing “the access by affiliated workers in Mexico to specialized fund management firms which will improve the risk-return ratio on investments abroad.”