Latin Finance - March/April 2012 - 44

Brazil wealth management

Good Times
By Ivan Castaño razil’s wealth management business is growing by leaps and bounds as banks and family offices fiercely compete to capitalize on the country’s rising prosperity. Assets under management in this sector are expected to reach a staggering $700 billion plus over the with Boston Consulting Group, next year. forecasts that the region’s wealth Yet so far, this new affluent management sector will grow by a segment is sticking to familiar comparatively smaller 9% a year by investments close to home rather than 2015. venturing into markets abroad. This “Brazilians are making a lot of should be a boon for the country’s money and investing a lot inside developing credit markets as well as the country but also outside,” Pieri stocks. says, estimating banks’ managed The growth of the wealth offshore funds will hit $300 billion management business is apparent to in 2013. “They [Brazilians] are any visitor coming to Brazil. Strolling buying properties and companies on São Paulo’s fashionable Paulista [both through equity stakes and Avenue these days, one can’t help but outright acquisitions] and putting notice how many banks are promoting some of that money into wealth their Premiere banking services management accounts.” catering to the newly minted rich. Banks Compete Brazil has been generating 19 The 19 millionaires-a-day figure millionaires a day since 2007, and includes individuals with $1 that trend is likely to maintain its Wealthy Brazilians are investing at home: Mifano million-$5 million reais ($550,000momentum well into the future as $2.8 million), according to Haliwell Latin America’s largest economy research. Pieri said this affluent segment, made up of newly continues to deliver comparatively healthy GDP growth, with rich executives that have amassed fortunes from fast-growing forecasts topping 4% annually over the next few years. businesses or real-estate investments, is the most coveted by Against that backdrop, wealth management houses are private banks. scrambling to attract new clients, or, as one banker put it, the Brazil has 137,000 millionaires and some 30 billionaires, new “affluent” segment of citizens holding $1 million-$3 million with 70% of the country’s wealth concentrated in São Paulo and in their bank accounts. Rio de Janerio, Pieri notes. According to Emerson Pieri, head of Latin American wealth “These people are making more than 500,000 reais a year management for Haliwell Bank, there’s no better time for wealth and have been doing so for the past four to five years,” ever management banks to do business in Brazil. He expects assets since Brazilian wealth began to grow on the back of a booming under management in this sector to grow a whopping 28% this economy and increased consumerism, adds Pieri. “Most of year to $760 billion, and by a similar rate in 2013. them already have $1 million reais and they want to grow their That sum will be largely focused on onshore investments, which should total some $500 billion. The other $260 billion will money.” On top of a burgeoning clientele, private banks are also be held in offshore accounts, Pieri forecasts. making higher profits in Brazil. For clients holding $1 million-$3 The numbers are well above growth estimates for Latin million in a wealth management account, banks make 2.1%America overall. Manuel Becerra, an industry consultant

Bankers are vying for a foothold in Brazil’s growing wealth management business. Assets under management are reaching new highs as wealthy Brazilians put their money to work.

44 LatinFinance

March/April 2012

Latin Finance - March/April 2012

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