Union Bancaire Privée (UBP) and its Chilean distribution partner are taking a series of fixed income Ucits funds on the road in Latin America in a bid to expand the Swiss asset manager's foothold in the region.
In January, UBP signed a distribution agreement with Excel Capital, which is also in charge of registering its funds with local market authorities in Chile, Peru and Colombia.
Excel has so far secured approval for 12 UBP funds, including the UBAM EM Investment Grade Corporate Bond, to receive investments from Chile's six pension funds, which ran $190 billion as of the end of June.
The partners are now planning a roadshow for the beginning of September to market the strategies to pension funds in Chile and Peru.
‘[Peru is] a market which is behaving pretty much in line with Chile,’ said Nicolas Faller, UBP's co-CEO of asset management. ‘[...] Colombia is also a target but it’s true that Excel has a very, very strong blueprint and connection with local players in [Chile and] Peru and we’re essentially relying on them.’
UBP and Excel also plan to meet with local asset managers and insurance companies in those two countries, Excel managing partner Felipe Monardez said in an interview.
The firms are focusing on marketing emerging markets fixed income and global high yield vehicles, and they’ve recently registered UBP’s flagship convertible bond fund in Chile, Faller said.
Excel hasn't yet raised capital for UBP. The Chilean firm also distributes funds for Henderson, Aberdeen and Aviva, and it's raised about $1 billion for those three managers so far this year, mostly in European and Latin American equity funds, Monardez said.
‘Our definition has always been to have no overlaps among managers and we liked that about UBP - at the end of the day they're a manager that had asset classes we didn't have, particularly in emerging market debt,’ Monardez said.
UBP runs about $10 to $20 million in assets in Latin America, with hopes of hitting $50 million by year-end and $150 million in 2018, Faller said.
The firm is opting for steady rather than quick growth to avoid large sentiment swings if any of the asset classes it’s focusing on become less popular among investors in the region, Faller said.
‘My objective is honestly to build a sustainable business,’ he said. ‘I’m not willing to get all of a sudden $2 billion and then almost zero.’
At the moment, the bank has no plans to open a physical office in the region and doesn’t work with US-based advisors who cater to Latin American investors, Faller added.
In other recent moves related to its Latin American expansion, UBP entered into a sub-advisory agreement last year with Chilean asset manager LarrainVial.