Big Opportunities For Family Offices In Colombia, Peru, Says GenSpring's Ulloa

Harriet Davies

20 April 2012

The top opportunities today in the growing Latin American wealth management market are in Colombia and Peru, says Santiago Ulloa, president of GenSpring Family Offices International, a firm with big plans for the family office market in the continent.

And as firms grapple to grow their share of the market, competition will undoubtedly intensify, but that’s no bad thing because it just means the industry is expanding, says Ulloa.

All the buzz around Latin America in the wealth industry comes down to the fact that there is a growing middle class in the continent, he explains, because these people are buying products and services and driving business growth, which is bolstering the fortunes of the continent’s entrepreneurs.

“The last 10 years has really been a positive time for Latin American countries in general; it has been a time of growth with some very interesting policy development, mainly in Brazil and in Colombia and Peru, really to transform the population as a whole from total poverty to a middle class,” says Ulloa, speaking to Family Wealth Report.

“I think for everyone this developing middle class is very important… most of our clients are entrepreneurs and have local businesses,” he adds, saying that the number of UHNW individuals has been growing, as well as getting richer. “It’s positive for everyone.”

The latest figures put the HNW population in Latin America at around 0.5 million, according to the Merrill Lynch/Capgemini World Wealth Report 2011. Within this though, the unusually high proportion of ultra-wealthy individuals – at around 2.4 per cent compared to a global average of 0.9 per cent – means total wealth stood at around $7.3 trillion in 2010.

Where are the big opportunities?

“For me the best opportunities of today and the countries that will be growing most in the next 10 to 20 years are Colombia and Peru. In both cases they are coming from very low ratios and they have been able to cut the poverty more than 20 per cent in the last 15 years, so that is impressive,” says Ulloa.

Ulloa notes that the underground economies in these countries are formalizing: “In the past there used to be a . So the profits have been much bigger, the fees have been much bigger and there is room, a lot of room, to reduce that on behalf of the clients.”

He knows the market will get increasingly competitive in the years to come, but he views the firm’s scale – with around $20 billion in liquid assets – and independence in terms of products as its biggest ace cards, as it will use this to try and drive down fees for the best quality products, he says.

“You need to provide service at the right price for your clients, and in order to do that you need enough clients and enough assets under management to access the best investment opportunities for them. Right now we are the market leader but we know that the industry is growing and many more players are testing the waters but we are happy with that, because… it means our industry is growing and that is a good thing. ”