MAPFRE AM starts selling its funds in Latin America

MAPFRE’s management firm has had its attention focused on Latin America for some time now. Harnessing the group’s capabilities, MAPFRE AM has now started selling its mutual funds in the region. According to FundsPeople, the "first sales in Uruguay and Colombia” are complete. “And the idea is to continue this process in Brazil in the medium term", asserts Álvaro Anguita, the management firm's managing director. "For us, this is an easily accessible market. We are targeting institutional investors and as part of this task, we are leveraging MAPFRE’s good reputation in LATAM, where it is well known," he added.

This is reflected through the Luxembourg-based SICAV MAPFRE AM, which consists of 12 different components depending on the investment policy. At an international level, agreements are in place with Allfunds, although "work is underway to close other distribution agreements in LATAM", he confessed.

In terms of product type, so far the greatest demand has come for Article 8 funds and European equity products. Although Anguita refuses to close the door on alternative products also being distributed in the future: "That would be the next step, but first, we need to do it here”, he asserted.

Objective: 1 billion growth in 2024

MAPFRE recently entered the Top 10 biggest management groups in Spain. It boasts 10 billion in assets under management which, according to the figures released, can be broken down as follows: 3,146 million in mutual funds; as well as managing 2,913 million in pension funds, of which 2,200 are individual and 700 million are employment funds; plus 150 million in EPSVs and a further 2,750 million in Bankinter pension plans, having closed an agreement with the Spanish bank. Finally, there are a further 1,200 million in Luxembourg.

Anguita confessed that they have "specific objectives for the next two years: growth of around 1 billion between 2023 and 2024". In addition, the management firm boasts almost 25 billion in Discretionary Portfolio Management among its own group companies. By product type, the greatest impetus is coming from guaranteed and profiled funds. Similarly, the Investment Horizon service, which includes life cycle funds, is receiving strong inflows of money.

The management firm's current strategy is aimed at reclassifying its products into Article 8 and 9 funds, and they do not rule out expanding its portfolio. For example, in Luxembourg, French boutique firm La Financière Responsable (LFR), in which MAPFRE holds a 51% stake, is due to launch a Master Fund Feeder. This is an Article 9 European variable income product with a view to "offering this in other jurisdictions outside of France."

Concerned about the impact of RIS

Generally speaking, Anguita considers that the industry is in good health, showing strong growth and is currently weathering the instability of the markets caused by the adverse geopolitical circumstances. However, one important topic is causing concern: the Retail Investment Strategy. "It could have an impact on the sector as it affects the distribution model and the size of management firms. We are heading toward a model that is going to favor passive management and large management firms", he asserts.

In MAPFRE's case, given its size, they are not worried: "We will continue addressing the increase in regulatory costs. However, it is important to remain aware that at the same time as these costs increase, there is also less income from fees, so margins are falling. The industry is making real efforts and perhaps some smaller firms will be squeezed out”, he warned.

In his opinion, "rather than focusing on costs, regulators should look at the service provided and its profitability. Until now, customers have chosen the way in which they want to interact with companies and they have extensive information should they want to change. What's more, I think it will be very difficult to implement the benchmark", he concluded.

Article originally published at FundsPeople.