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Última actualización: 07:45 / Friday, 24 de May de 2019
Column by Arturo Hanono

#10YChallenge for the Mexican Pension Funds' AUM

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By Arturo Hanono

The assets under management of the Mexican Pension funds, or Afores, expressed in dollars grew 149%, when the assets passed from 67.771 to 168.583  billion dollars between December 2008 and December 2018. These figures expressed in dollars include the movement of the exchange rate of 13.83 pesos to 19.65 pesos (+ 42%) in 10 years.

In December 2008 there were 19 Afores in the market of which 10 prevail today because of various mergers. For some Afores, their growth came about because of an aggressive commercial strategy, as well as attractive yields, while for others it was due to merges.

Of the 10 Afores that today prevail six have merged others and only four haven´t (Azteca, Coppel, Invercap and PensiónISSSTE) according to CONSAR document: Corporate events in the Savings System for Retirement. A total of six mergers and purchases happened between the years 1998-2008 and 11 were made in the last 10 years. The purchase of MetLife by Principal (2018) isn´t identified in this document.

The Afores with the highest growth in assets in terms of dollars are:

  1. Coppel (+ 1,269%). Its growth is explained by a specialization in the low-income worker and without any purchase. Coppel went from a 1.1% market share to 6.2% in the last 10 years that leads it to occupy the 7th place. It stands at 94 million dollars (1%) of PensiónISSSTE who is in 6th place. Afore Coppel manages 10,406 million dollars.
  2. XXI-Banorte (+ 818%). Is growtht comes from the mergers of: Ahorra Ahora (2009), IXE (2009), Argos (2009), Banorte Generali (2012) and Bancomer (2013). In 10 years, its market share grew from 6.1% to 22.5%, currently the largest. Afore XXI-Banorte manages 37,882 million dollars.
  3. Azteca (+ 410%) just as Coppel has specialized in the low-income worker and hasn´t made any purchase of Afore. Between December 2008 and December 2018 its market share went from 1.1% to 2.2% and is in the 10th place. Afore Azteca manages 3,785 million dollars.
  4. Principal (+ 317%). It has merged the Afore of: Atlantic-Promex (1998), Zurich (2002), Tepeyac (2003), HSBC (2011) and last year to MetLife (2018). In 10 years, it rose from 4.0% to 6.8% market share and now is in the 5th place. Afore Principal manages 11,409 million dollars.
  5. Profuturo (+ 247%). It has merged the Afore of: Previnter (1998), Scotia (2010), Afirme (2014). Its market share increased from 10.5% to 14.7%. This Afore occupies the 4th place and is only 1% to reach Sura who occupies position 3. Afore Profuturo manages 24,789 million dollars.
  6. PensiónISSSTE (+ 229%). Its growth has been organic without having made any acquisition. Its market share increased from 4.7 to 6.2% and now is in 6th place. Afore PensiónISSSTE manages 10,500 million dollars.
  7. Sura (+ 197%). Acquired Afore ING (2012) who previously merged Santander (2008). Although Sura has remained in place 3, its market share increased from 12.4 to 14.8%. Afore Sura manages 24,928 million dollars.
  8. Invercap (+ 169%). It has not made any merger. Its market share has only increased from 4.7 to 5.1% and holds the 8th place, same place it was 10 years ago. Afore Invercap manages 8,593 million dollars.
  9. Citibanamex (+ 148%). Merged Garante (2002). Its market share has practically maintained it since in 2008 it was 18% and in 2018, it is 17.9%, which has allowed it to hold the 2nd place. Afore Citibanamex administers 30,214 million dollars.
  10. Inbursa (-4%). Acquired to Capitaliza (1998). Its market share fell from 9.3% to 3.6% and is the only Afore that reflects a reduction in assets under management in 10 years (-4% in dollars) and holds the 8th place. Afore Inbursa manages 6,077 billion dollars.

This year Profuturo could rise from 4th to 3rd place beating SURA as the difference is only 0.6%, while Coppel could do the same to PensiónISSSTE as the difference is 0.9%, which would allow it to rise from 7th to 6th place.

Surely, the consolidation process will continue in the coming years.
 

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