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Michael Sanders, chairman of the board, Alceda Fund Management

Alceda partners with AFINA to expand offering in Latin America


Alceda Fund Management is partnering with AFINA Holdings, based in Philadelphia, US, to expand its business in Latin America.

AFINA, which is a specialist financial services company focused on Latin America, will help to identify investment strategies that are proven and unique for the local market.
With Latin America predicted to offer explosive growth potential in the next 10 years, Alceda has identified an opportunity to partner with a regional expert to offer first class solutions to the institutional and retail market.
Michael Sanders (pictured), chairman of the board, Alceda Fund Management, says: “Investors from Latin America are becoming increasingly sophisticated and are seeking proven strategies with better returns than they can get in their local markets. They are now looking beyond their own region towards Europe, the US, Africa and Asia.
“For many Latin American investors, their key investment concerns are the transparency of the manager and that manager’s investment strategy, liquidity and ease of access to their investments. Through our partnership with AFINA, we are able to offer these investors access to Luxembourg domiciled funds, especially UCITS approved funds, and to provide confidence to all investors, as well as transparent and well-structured funds.
“We expect the Latin American institutional market, especially the public pension funds, to continue to invest aggressively in Luxembourg.”
Analysis from AFINA predicts explosive growth in Latin America over the next ten years, with estimates that assets under management could reach USD4trn by 2020. Likewise, although growth rates have slowed down in the past two years, they are estimated be around 3.5 per cent, a faster pace than most developed countries. Indeed, the World Bank estimates that in the past decade the middle-class has increased from around 100 to 150 million people.
David Godfrey-Thomas, chief executive officer, AFINA, says: “Money managers from outside the region are under the false illusion that what works in one market will work in Latin America. Our job alongside Alceda is to identify those strategies that are proven and unique for the Latin American market. We want to bring investors strategies that add value to their portfolios and, most important, construct the right vehicle for ease of access. Because a preferred fund domicile is Luxembourg and because Alceda strives to add unique, innovative strategies to their platform, this offers a great entry opportunity for local investors.”
Alceda and AFINA believe that improved policies are helping Latin America to weather the global economic turbulence and to expand the middle class which, in turn is creating robust demand. This middle-class has more disposable income, has increased spending power and is more focused on long-term investment.
High net worth individuals, family offices and multi-family offices are becoming more demanding in terms of investment choices. Likewise, the institutional market (public and private pension funds, insurance companies and banks) is continuing to grow at an accelerated pace. They too are looking for new investment choices.
The framework of the Latin American Integrated Market, otherwise known as MILA, which aims towards a full merger of the stock exchanges in the Latin American Markets, is also expected to bring a greater demand for innovative independent financial products as the markets are no longer isolated and will naturally become more competitive.
Sanders says: “The perception of the Latin American region is changing with a greater number of US, European and Asian investors looking for new opportunities. Indeed, asset managers in Latin America have been managing money in their local markets and region successfully and offer great investment solutions.
“The need for alternative solutions has increased and providing clients with targeted, innovative and value added strategies from independent asset managers has become an essential part of the growth in the market. The MILA is an ideal space in which to demonstrate the value inherent in the Alceda-AFINA partnership. We will work with AFINA to provide the right fund vehicle for Latin American strategies and distribute them to international investors.”

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