Global battle rages for LatAm wealth market clients
Wealth management in Latin America is experiencing turf wars on an international scale between asset managers, private banks and family offices hoping to win over the rising number of affluent clients.
Paul Karger, managing partner at Boston-based multi-family office Twin Focus, says wealth management has attained craze-like status in Latin America.
“It’s a hot area today. MBA students all want to go into wealth management or private banking. Ten years ago they were in venture, then hedge funds and private equity.”
Although some international wealth managers are aggressively targeting the Latin American market, others are making a discreet exit. In January, Barclays Wealth closed its only Latin America-based office in Buenos Aires.
In July 2011, ING sold its Latin American pensions, life insurance and investment management operations to Grupo de Inversiones Suramericana, a Colombian financial holding company, for €2.68bn.
Two months later, HSBC sold its private banking arm in Chile to Banco Itaú Chile, a determined local market participant. Having acquired HSBC’s four Santiago branches representing more than 4,000 clients, Banco Itaú Chile’s parent group, Itaú Unibanco, went on to form a partnership with Munita Cruzat & Claro, a Chilean wealth manager managing $2bn of assets for about 350 clients.
Latin American groups are not simply acquiring. They are also consolidating. Brazilian investment banking group BTG Pactual and Chilean investment manager Celfin Capital recently merged to form a new Latin American investment bank targeting asset management opportunities in Brazil, Chile, Peru and Colombia. It might also expand into Argentina and Mexico at a later stage.