For nearly half a century, Argentina has been a hotbed of offshore asset gathering, and it remains so to this day.
Historically, Argentina generated interest from global private bankers because of its notorious economic and political instability. Individual Argentine investors large and small have never had full confidence in their local banking system, and have preferred to channel significant percentages of their cash flow into accounts in offshore domiciles. Given the demand for offshore exposure, the wealth-management industry has flourished in response, with the number of offshore wealth firms and financial advisors in Argentina and nearby Uruguay outnumbering their peers in other large Latin American countries, such as Brazil, Chile, Mexico and Colombia.
Importantly, the prolonged financial crisis in Argentina stemming from its 2001 default and the protectionist policies of nationalist presidents Nestor and Christina Kirchner, chased prestigious wealth managers like Merrill Lynch, Wells Fargo and others from the country, with most larger firms choosing to service their Argentine clientele from Montevideo. Through the first half of the current decade, demand for offshore product continued very strong in the face of currency controls, rampant inflation, and increasing mistrust of the financial system.
But with the election of Mauricio Macri in 2015, there was improvement on several levels: the country rejoined the global financial community, made good on its outstanding debts, freed up currency controls, fortified the local financial system, and ended its hostility to foreign participation in local markets. Macri’s government also implemented a successful tax amnesty, with Argentines declaring more than USD 100 billion in overseas investments. Most of these assets continue offshore.
The sea change in the operating environment has attracted the attention of wealth managers from abroad and also neighboring countries, including UBS, Julius Baer, Brazil’s Banco Pactual, Chile’s Moneda Asset Management and LarrainVial. All have expressed interest in establishing Buenos Aires-based operations, offering both offshore and onshore solutions.
To lay the groundwork for this resurgence, in September 2017, Macri’s government created a special designation of global investment advisors (AGIs), the first step in its plan to formalize private-banking activity within the country. The AGIs will be able to advise clients who have money both on and offshore, will operate under brokerage and advisory rules and be able to sign agreements with local and international broker-dealers.
The move will help pave the way for foreign firms to commence distribution operations in the country and for local firms to enhance their offering to include offshore vehicles. In short, 2018 promises to be a pivotal year in the establishment of a formal, transparent, financial advisory industry in Argentina, with new platforms being created and new relationships being forged with cross-border asset managers.
For these reasons alone, Argentina is the perfect venue for a 2018 fund selector event. But the city’s splendor makes it an attractive destination for neighboring countries’ most influential selectors, including those from Chilean, Peruvian and Brazilian pension and wealth managers.
Fund Pro Latin America has been active in the region since 2001 and has unparalleled knowledge of the cross-border asset management industry in Latin America. Open Door Media is a provider of integrated marketing solutions for asset management companies who want to access and influence fund selectors and has an enviable reputation for producing award-winning conferences.
The joint venture between the two companies has created a compelling proposition for any asset management company looking to raise its profile, build relationships and distribute funds across the LatAm region.