The interest of foreign operators to enter the Asset Management business in Mexico keeps on growing.
Late last year, the Swiss bank Julius Baer completed the acquisition of 40% of the Mexican company NSC Asesores, a firm that serves as an independent financial advisor in Mexico since 1987. BNP Paribas Investment Partners Mexico last month announced its foray into the Mexican market through mutual funds and mandates.
The Azimut Group expects to receive authorization in the near future to become a fund operator. Azimut Group acquired Mexican Más Fondos owns more funds (founded in 2002) which is the largest integrated distributor of investment companies in Mexico.
A few days ago we read in the news that Afore XXI Banorte finally funded the two mandates it gave BlackRock and Schroders back in 2013. BlackRock received 320 million dollars and Schroders 220 million dollars.
This business has very interesting numbers, where many firms want to enter but only five have been able to do since only two Afores have participated in this type of vehicle. Although CONSAR allowed mandates since 2011, Afore Banamex was able to fund the strategy until 2013 and Afore XXI Banorte just in the last month.
According to updated information of the regulator (Consar), US$ 2.2 billion have been promised to five Global Asset Managers: BlackRock, Pioneer, Schroders, Franklin Templeton and Banque Paribas. Approximately 60% of the resources allocated come from Afore Banamex and 40% from XXI Banorte. If all Afores diversify using a mandate, this amount is equivalent to only 8% of the US$28.4 billion that the 20% limit allows. Currently the Afores manage about US$142 billion in assets.
The appetite for having a presence in Mexico is due to a growing market with increasingly sophisticated needs; as well as confidence in the country, given Mexico has become a very attractive market in Latin America, as well as a sizeable potential revenue.
Some firms are redefining their business in Latin America as in the case of Deutsche Bank which will sell or close its business in 10 countries, five of them in Latin America -including Mexico, however, from my point of view, the reason for this has more to do with specialization than with a disdain for the region.
Considering the appetite to enter the Mexican market, local and foreign participants who are already present, can not sit and wait it out while strong competition is displayed. In fact, there is speculation that there are a couple of signatures embedded in evaluation processes and more advanced in local authorizations.
Column by Arturo Hanono
Arturo Hanono is an institutional asset manager in Mexico. He has more than 30 year's experience in the Asset Management world, of which 15 he spent as a private banker and in the last 18 years has been CIO in several Afores. He has a degree in Economics from Universidad Anáhuac (1983). For his professional thesis, he won first place in the National Stock Market Prize organized by the Mexican Stock Exchange in 1985.
You can find him at firstname.lastname@example.org