Federico Tomasevich

PRESIDENT OF PUENTE

Argentina 2017  I  Finance  I  Interview

BIOGRAPHY Graduated in the IAE Business School, he also attended the Global CEO Program from the renowned Wharton School and the China European International Business School. With 41 years old, he is the youngest and one of the most successful CEOs of Argentina’s burgeoning financial sector.

“WE WANT TO BE THE BEST OPTION TO CONSOLIDATE THE CAPITAL MARKET IN ARGENTINA.”

AS THE MARKET LEADER IN THE SOUTHERN CONE, CAN YOU TELL US MORE ABOUT YOUR ACTIVITIES IN THE REGION?

 

Puente is based in the United Kingdom and is present in Argentina, Uruguay, and Paraguay. Our financial services hub, which includes a bank and a broker-dealer house, is located in Panama. We operate as an investment bank offering wealth and asset management, advisory and trading. Our wealth management unit has over USD 4 billion in assets under management and we are the largest issuers in the primary market with 100 transactions last year. We have also increased our asset management unit with the acquisition of Megainver in 2013. At the time, the company had USD 50 million in assets under management and today reached USD 1.1 billion and has become the fastest growing company in Argentina.

 

We offer unparalleled services for market operations with the best research coverage of fixed and variable-income assets in the Southern Cone, helping foreign institutional investors to have easy access to assets in the region. In Uruguay we operate almost 60% of the volume of bonds issued in dollars in the country and in Paraguay approximately 35% of the volume operated in the country. The largest foreign investors in Uruguay are from Argentina and in Paraguay are the Uruguayans, so there is a deep culture link between these countries. We are one of the companies responsible for bringing the largest amount of institutional investors to Paraguay, Uruguay, and Argentina. Our research teams offer analyses of all the markets we operate as well as developments in national and international financial markets. We provide to our clients’ essential local knowledge to make their investment decisions. Our teams are regularly traveling to showcase investment opportunities to investors from the US, Latin America and Europe.

 

We are working with the world’s leading pension funds, sovereign wealth funds, hedge funds, private equity funds as well as family offices. We want to be the best option to consolidate the capital market in Argentina. We want to grow organically and inorganically. We are looking for an international partner and we will go public during the next year. In Uruguay, we acquired two local brokers, and we are in the same process in Argentina.

 

WHAT ARE THE MAIN POLICY OR REGULATORY CHANGES THAT COULD ACCELERATE THE DEVELOPMENT OF ARGENTINA’S FINANCIAL SECTOR TODAY?

 

Recently, the Government has approved a tax amnesty attracting over USD 130 billion in undeclared assets that can fuel a boom in investments from Argentines with foreign assets. The main reasons for this is because Argentine assets yield much more than others in the region, have much more upside and also because local investors don’t have to pay income tax on Argentine assets. Another significant regulatory change that will take place is that financial entities will be able to serve private banking clients using their accounts in Argentina and abroad. If a client has the option to use the same banker to cover his international account, the growth in the sector will be disruptive and can reach an additional USD 10 billion of assets under management in the next two years.

WITH THESE CHANGES, WHAT IS YOUR FORECAST FOR THE FINANCIAL MARKETS IN ARGENTINA IN THE COMING YEARS?

 

Argentina is the second largest economy in the Southern Cone after Brazil and they are the only two countries in the region for businesses with scale. Argentina was out of the international capital markets for the last ten years and hasn’t participated of the boom of other Latin American countries such as Chile and Peru. For example, consider the comparison of assets under management against GDP and the result is that Argentina has five times lower levels than any other Latin American country. The sovereign debt is at 30% while the Latin American average is double and the provinces debt level is low, close to 25% of the GDP. The financial market in Argentina has the potential to triple in a few years.

 

The new Government has succeeded in opening up Argentina’s economy by making a return to global credit markets with an improved policy stance that supports a return to economic growth in 2017. As a result of this host of market-friendly policies, Argentina’s credit rating has improved and it is also expected that in the short-term it can win back its status as an emerging market in the influential MSCI benchmark equity index which can bring an additional USD 1 billion in inflows. Today, the cost of operating in Argentina for the Government or companies has been reduced as well. There is increased interest from foreign investors and plenty of attractive investment opportunities available in the market.