MAPFRE brings together Brazil's largest investors in Madrid

Rising inflation since the pandemic and the subsequent rise in interest rates, the slowdown in some economies, and longer-term trends such as increasing life expectancy have complicated the outlook for pension plan managers.

“This is a reality in many regions of the world, including Latin America. The drop in the birth rate, together with the increase in life expectancy, represent an additional challenge for pension funds,” said Ricardo Ventrilho, Head of Investor Relations at MAPFRE Investimentos during his speech at the meeting 'A Estructura da Previdéncia na Europa', sponsored by MAPFRE AM and organized by Abrapp, the association that represents pension institutions in Brazil.

Gonzalo de Cadenas Santiago, Deputy General Manager of MAPFRE Economics, added during his speech at the event that the demographic factor has a major impact on both growth and savings: life expectancy has increased, and along with it, there has been a decline in the birth rate. “Latin America has already capitalized on what economists call the demographic dividend,” he noted.

This demographic transition that the continent has been undergoing in recent years is taking place without having generated sufficient savings: there’s currently a ten-percentage-point gap between the region's gross savings, at 21%, and its savings needs, estimated at around 30%.

"Savings in Latin America fall short by any measure; it ranks second lowest among economic regions and remains disproportionately low considering its income level, especially if we take into account the state of its demographic transition," stated the Deputy General Manager of MAPFRE Economics, stressing the importance of directing and intermediating these savings through the finance sector.

For De Cadenas Santiago, the most effective strategies to promote savings involve adjusting fiscal policies and different tax rates to incentivize savings efforts, as well as reducing informalities in both the labor market and savings sector and strengthening financial literacy.

Sustainability: key to MAPFRE's strategy

Sustainability is one of the main trends in the investment world, and it has been a central focus of MAPFRE's strategy since 2017, the year the Group acquired a 25% stake in French asset management firm La Financière Responsable (TRF). And last February, it acquired another stake that allowed it to increase that percentage to 51%, making it the majority shareholder.

“Our methodology is useful for avoiding “greenwashing.’ The most important thing for us was to avoid reputational problems and to make sure that everything we did in this regard was 'in-house'," said Eduardo Ripollés, Manager of Institutional Business Development at MAPFRE AM, in his speech at the event.

Since then, MAPFRE AM has launched three mutual funds with sustainable characteristics together with TRF: MAPFRE AM Capital Responsable, MAPFRE AM Inclusión Responsable, and MAPFRE AM Good Governance.

Ripollés also stressed that a sustainable approach is not incompatible with attractive returns for investors, and these three vehicles are the best example. MAPFRE AM Inclusión Responsable achieved a one-year return of 14.6%; MAPFRE AM Good Governance, 12.59%, and MAPFRE AM Capital Responsable, 4.28%.