Afore XXI Banorte, the largest pension fund in Mexico, successfully completed the funding of its third investment mandate. On this occasion it granted $700 million to three managers to actively invest in US equities. Alliance Bernstein received $250 million, JP Morgan Asset Management $150 million and Loomis Sayles & Company (owned by Natixis Global Asset Management) received $300 million.
To date, the pension fund administrator of Grupo Financiero Banorte and the Mexican Social Security Institute (IMSS), has funded three investment mandates; the first in European stock markets for approximately $1.1 billion, the second in the Asian market for approximately $1 billion and the latter with exposure to the United States for $700 million.
Mauricio Giordano, CEO of Natixis Global Asset Management Mexico, told Funds Society that “US equities are not normally considered to be alpha-generating, since the average manager does not beat the market, and what I tell the players is why to see the average if there are managers like Loomis who consistently present an overperformance.” The director added that the funding of this mandate came in only two months which is proof that “when you have well-structured teams with a very clear plan things can be done very fast.” Loomis will actively manage 3 segregated US Equity portfolios for Afore XXI Banorte. The Large Cap Growth accounts will be managed by seasoned US growth manager Aziz Hamzaogullari and his dedicated research team, using their proprietary bottom up research structured around quality, growth and valuation.
Aziz Hamzaogullari, VP and Portfolio Manager Loomis Sayles Growth Equity Strategies team, commented: “We are delighted that Afore XXI Banorte has chosen Loomis Sayles as a strategic partner. We believe in taking a long-term, private equity like approach to investing. Through fundamental research, we look to invest in those few high-quality businesses that we believe have sustainable competitive advantages and secular growth when they trade at a significant discount to intrinsic value”.
This transaction gives Afore XXI Banorte the opportunity to take advantage of the conditions of the United States stock markets and actively manage the portfolio for the benefit of its clients. “With the funding of this mandate, Afore XXI Banorte confirms its commitment to affiliates, offering the best investment product for their retirement in Mexico under the management of specialized firms with extensive international experience. In addition to this, we used the services of a temporary administrator known as “transition manager” and a proven international custody model, all in order to enhance the performance of our portfolio for the benefit of our affiliates in the long term”, said Juan Manuel Valle, Chief Executive Officer at Afore XXI Banorte.
Sergio Méndez, Chief Investment Officer at the pension fund, commented: “With the funding of this mandate with exposure to the North American region we finalized the first phase of our plan on the outsourcing of investment services, maximizing the use of our investment regime, which places Afore XXI Banorte at the forefront in the local market.”