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JP Morgan and Santander sign AM deal in Brazil

JP Morgan and Santander sign AM deal in Brazil

JP Morgan Asset Management will transfer management of Brazilian domiciled funds, with a total of 13 billion reals ($4.1 billion) in assets, to Santander Asset Management as part of an agreement between the two fund houses.

In turn, Santander, which runs 263 billion reals ($81.2 billion) in Brazil, will distribute select JP Morgan feeder funds investing in global strategies to local investors, according to a statement by the two firms.

The distribution agreement is not exclusive, as Santander will be added to the roster of partners that already distribute JP Morgan funds, including Brazil's XP Investimentos, a JP Morgan spokesperson added. 

JP Morgan, which manages about 21 billion reals ($6.5 billion) in Brazil, runs its locally-domiciled funds from its office in that country. The firm declined to comment on what will happen to its portfolio managers running the strategies Santander will take on.

The transfer of JP Morgan funds to Santander is subject to investors’ approval, which the managers will seek in the next few days. 

JP Morgan’s and Santander’s agreement doesn’t involve a joint venture or ownership transfer between the two firms, according to the statement.

Growth plans

For Santander, the deal offers an opportunity to consolidate its asset management business, according to the statement.

JP Morgan is seeking to solidify its presence in Brazil as local investors look to diversify given the low-interest rates scenario, said Vital Menezes, chief executive for JP Morgan’s Latin America asset management arm.

A reform in 2014 made it easier for Brazilians to invest abroad by lowering ticket minimums. Interest in international assets, which had been slow to pick up, seems to be finally taking hold.

Against that backdrop, US asset manager Legg Mason expanded its feeder fund range in Brazil in November, and AllianceBernstein is planning the launch of its own set of feeder funds there. 

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