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Business brief: Uruguay's Nobilis on post-merger plans

Business brief: Uruguay's Nobilis on post-merger plans

In our Business Brief series, we take a closer look at a firm to find what makes it tick.

We chat with Federico Araujo, who looks to local soccer hero Luis Suarez when it comes to running his business. The co-founder of broker-dealer Nobilis says it’s all about having passion for your work and he’s now looking to expand his group’s services.

 

What are your growth plans for the next 12 months?

We see two sources of growth. On the one hand, our customers are entrusting us with a greater proportion of their portfolios once they have seen the level of professionalism and support we can offer.

At the same time, the dynamics of the industry have seen several players pull out of the local market, leaving customers dissatisfied. Clients want regular contact with their advisors.

What is your appetite for taking risk as a business?

Over the years clients have been asking us for more services. Many of them want not only advice but their assets managed on a discretionary basis. Now that we have more resources, our next aim is to meet this demand by moving into asset management.

What company do you admire and why?

That’s difficult to answer but I think LarrainVial is a good example. It is a local company for local people that follows global best practices. It cover three areas: private banking, brokerage and asset management. We are already strong in the first two and we have all the resources to implement the third.

What is the main challenge facing your business?

Increasing regulation, but thanks to our recent merger [see box-out below] we have turned this challenge into an advantage versus our peers.

We consolidated a team of internal and external professionals that focus exclusively on these aspects to achieve the highest standards in this area. This, in turn, is valued by our customers because they recognize a company with institutional strength.

How do you use third party mutual funds?

In the past, all of us intended to gain access to this market but encountered various obstacles, including difficulty tapping into an extensive menu of products, the tax treatment imposed on our customers, high transactional costs and our capacity to analyze the various products.

Thanks to the merger, we have access to custodial platforms that enable us to solve operational problems.

In turn, the formation of a team specialized in analysis and trading allows us to offer our customers the best selection of products.

 

Mega Montevideo merger

By Atholl Simpson

In December 2015, four Uruguayan brokerage firms announced merger plans to create the country’s largest trading house. After being given the green light by the local market regulator, the new group was launched at the start of this year under the name Nobilis.

The four constituents were Federico Araujo’s Merfin Sociedad de Bolsa, which he had founded a few years earlier, Comas Corredor de Bolsa, Pollio

Hermanos Sociedad de Bolsa and Rospide. One of the motivations behind their decision to merge, the groups said, was the need to adapt to a changing market place in Uruguay, which is introducing stronger regulation and controls on the country’s financial institutions.

The Uruguayan capital market is small, with around 90% focused on fixed income, mainly government bonds. Another common goal for the group’s founders is to help increase the diversification of Uruguayan clients. 

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