An attractive dynamic. A growth opportunity. A business hub with growing momentum. There are many compelling aspects that UBS Global Wealth Management (UBS GWM), one of the world’s largest wealth management firms, sees in Latin America. The firm is bolstering its operations in the region, leveraging wealth that is becoming increasingly international and looking to diversify its investments beyond the dollar and the United States.
“The last few years, in general, have been very dynamic around the world and, in particular, in Latin America, due to the macroeconomic situation and the growth of our primary clients,” stresses Simón Toros, Market Head for Central America and the Southern Cone at the Swiss-parent company, in an interview with Funds Society.
Driven by the tailwinds of a commodity boom—given the region’s exposure to raw materials, energy, and agriculture—and technology, thanks to the AI boom, family fortunes have been growing across most of the region’s major markets, according to the executive.
This dynamic underscores UBS’s intentions for the Latin American bloc. Its integration with Credit Suisse nearly doubled its assets in the region, establishing it as a dominant player in the business. “It has positioned us as number one in Latin America,” asserts Toros, adding that this has allowed them to place greater focus on various countries across the region.
It is against this backdrop that the Swiss group decided to enhance its Latin American branch by designating it as a Business Unit last year, under the leadership of Marcelo Chilov as Head of the unit. This creation makes it the fourth regional business unit for UBS GWM, alongside the United States, Europe and Middle East, and Asia.
The Latin American Business Unit is, in turn, structured around four markets: Brazil, Argentina, Mexico, and the remaining markets—specifically, Central America and the Southern Cone (CAS). All told, they maintain a local presence with offices in Brazil, Mexico, Chile, Colombia, Uruguay, and Panama, which serves as their regional hub.
“The simple fact that we now have a dedicated unit within Global Wealth Management for LatAm gives you an idea of the importance of the region and the potential growth we see,” notes Toros.
Diversifying Beyond the Dollar
Toros describes an environment where discussions with individuals, MFOs, and institutions are becoming more dynamic, particularly when looking at sectors attracting the most attention. “The source of economic growth is not evenly distributed. There is a very strong impact from commodities and technology. That naturally captures investors’ attention as they look for where to allocate,” he explains, which has pushed them toward spaces such as semiconductors and gold.
Furthermore, the trajectory of U.S. interest rates has enhanced the appeal of investment-grade fixed income, while alternative assets have been gaining greater prominence in portfolios for years.
Beyond portfolio allocations, however, UBS GWM sees a universe of Latin American fortunes that are increasingly interested in diversifying, both in terms of currencies and asset domiciles.
“Speaking specifically about Latin America, everything happening in the U.S. and all the geopolitical issues on the agenda bring up many questions regarding the dollar,” explains the CAS region Head, adding that the northern country’s public debt and interest rates have highlighted the importance of varying currency exposures.
New Domiciles for Wealth
Regarding jurisdictions, Toros confirms that they see greater interest in looking outside the U.S.—the traditional destination for Latin American offshore investments—due to the political climate and narrative surrounding the country. “We have had numerous conversations and seen capital movements toward alternative jurisdictions,” he explains, though he emphasizes that “it does not always entail a shift in asset allocation.”
Where are they looking? The executive points to Europe and Asia as areas of rising interest.
In Europe’s case, Toros highlights Switzerland—UBS’s central hub—and the booking center they opened in Germany. In the case of more sophisticated Latin American markets, some are turning toward Luxembourg, he notes.
In Asia, Latin American interest stems from commercial ties that are growing closer between both regions. The main appeal, he explains, lies in gaining easier access to Asian markets. In that regard, South Korea and Taiwan stand out on the global stage due to their role in the semiconductor market.
Business Opportunities in the Neighborhood
According to UBS GWM, another area Latin American investors are examining closely is their own region. “There is an intra-Latin American capital flow that we have never seen before,” indicates Toros, with private banking clients highly active in investing across various businesses in the neighborhood.
The executive sees two parallel phenomena heading in that direction. On one hand, family-owned businesses are expanding beyond their home country’s borders; on the other, family fortunes are increasingly interested in investing in Latin American ventures.
The wealth management giant views this trend as a business opportunity. Following the implementation of this philosophy at the group level, they established a Client Connectivity team in the region.
Previously, Toros recounts, UBS GWM teams focused solely on the local markets where they were based, but they realized there is an ongoing search for investment opportunities. Clients are requesting advice and connections for different business ventures across various countries, and UBS is capitalizing on its extensive regional network.
“We try to connect clients with one another so they can talk,” the professional explains, leveraging their strong regional presence serving clients across 20 countries. “Latin American economies have opened up significantly to foreign capital,” he adds.
