Julius Baer Group Ltd. bought a stake in a Mexican financial firm, the Swiss bank’s first entrance in one of the world’s fastest-growing countries for private wealth.
Julius Baer, Switzerland’s third-largest wealth manager, agreed to acquire a 40 percent stake in NSC Asesores, the largest independent financial advisory firm in Mexico City with about $3 billion in assets under management, the Zurich-based bank said in a statement on Monday. The terms weren’t disclosed.
Julius Baer has an arrangement to increase the stake in the future, Chief Financial Officer Dieter Enkelmann said at a presentation in Zurich. The Swiss bank joins firms including Santander SA, JPMorgan Chase & Co. and Credit Suisse Group AG, which also offer private banking services in Mexico.
“We’re very confident on the economy of Mexico going forward,” Julius Baer Chief Executive Officer Boris Collardi, 41, said in a telephone interview. “It has huge potential.”
The Mexican economy expanded 2.5 percent in the first quarter from the year earlier, faster than Germany, France and the contracting Swiss economy.
Private wealth in Latin America grew about 10 percent to $3.7 trillion from $3.4 trillion in 2014, with Mexican riches surging 15 percent, according to a study in June by Boston Consulting Group. Latin America’s wealth is expected to reach $6.6 trillion by 2019, outpacing wealth growth in the Middle East and Africa, according to BCG.
While affluent Mexicans tended to move money to the U.S. or Switzerland in the past, the local industry is commanding a growing share of services to the rich, Collardi said. Julius Baer will only serve Mexican clients outside their country of residence if the bank has assurances of their tax compliance, he said.
Collardi has observed a similar offshore-to-onshore industry trend in Brazil, the region’s largest wealth management market, where Julius Baer boosted its interest in financial firm GPS Investimentos Financeiros e Participacoes to 80 percent last year.
“I wouldn’t be surprised if very soon we have some form of initiative from the Brazilian government to call on citizens to repatriate taxes from undeclared offshore accounts,” the CEO said. “The business model for the future will be to have some form of onshore operation like we have, or to have a fully tax-compliant cross-border business.”
Julius Baer also has offices for Latin American clients in Panama, Uruguay, Chile and Peru and a booking center in the Bahamas. Collardi said Colombia is next on his Latin American shopping list. The CEO has also said he’s interested in acquisitions in Switzerland and in other emerging markets, including Asia.