[et_pb_section fb_built=”1″ _builder_version=”3.0.47″][et_pb_row _builder_version=”3.0.47″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”4_4″ _builder_version=”3.0.47″ parallax=”off” parallax_method=”on”][et_pb_text admin_label=”Introdu\u00e7\u00e3o” _builder_version=”3.1.1″]<\/p>\n
In a global context of protectionism, Sovereign Wealth Funds<\/strong> and other institutional investors (\u201cSWFs\u201d) continue to play a crucial role in cross-border investments<\/strong>. With over $ 12 trillion<\/a> of assets under management, they continue to be one of the largest group of asset owners and one of the most active buyers of fixed income, public equities and alternative assets around the world.<\/p>\n [\/et_pb_text][et_pb_text admin_label=”FDI in Latin America” _builder_version=”3.1.1″]<\/p>\n [\/et_pb_text][et_pb_text _builder_version=”3.1.1″]<\/p>\n Foreign Direct Investment (FDI)<\/strong> contracted globally in 2018. In Latin America, the flows decreased by 6 % to $ 147 billion<\/a>, as the economic recovery stalled. The tightening was fell most in Brazil and Colombia; while flows remained stable in the rest of the region. The industries of interests continue to be natural resources (including mining), infrastructure and consumer goods<\/strong>, especially those related to IT.<\/p>\n However, the region is still vulnerable to external factors<\/strong>, including monetary policy in the US and its tensions with China and other partners. Tariffs imposed in new industries such as automotive can mean higher price of commodities like copper, which is one of the main exports of the region.<\/p>\n [\/et_pb_text][et_pb_text admin_label=”SWF investments” _builder_version=”3.1.1″]<\/p>\n [\/et_pb_text][et_pb_text _builder_version=”3.1.1″]<\/p>\n At the beginning of 2005, three SWFs first signaled the interest in the region: Abu Dhabi\u2019s ADIA<\/strong><\/a> and Kuwait\u2019s KIA<\/strong> <\/a>committed to Conduit Capital Fund<\/a>, with a focus on power generation across the continent, and Singapore\u2019s GIC<\/strong><\/a> invested $ 200 million<\/strong> in a JV with AMP to acquire distribution facilities in Mexico.<\/strong> Since then, Sovereign vehicles from around the world have poured $ 36 billion in the region, including infrastructure and energy assets, real estate and fund investments.<\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/ideasen.llorenteycuenca.com\/wp-content\/uploads\/sites\/6\/2019\/07\/Tabla_1000px_ENG.png” disabled_on=”on|on|” admin_label=”Image web” _builder_version=”3.1.1″][\/et_pb_image][et_pb_image src=”https:\/\/ideasen.llorenteycuenca.com\/wp-content\/uploads\/sites\/6\/2019\/07\/Tabla_1000px_ENG.png” disabled_on=”on|on|” admin_label=”Image web” _builder_version=”3.1.1″][\/et_pb_image][et_pb_image src=”https:\/\/ideasen.llorenteycuenca.com\/wp-content\/uploads\/sites\/6\/2019\/07\/Tabla_750px_ENG.png” disabled_on=”off|off|on” admin_label=”Imagen m\u00f3vil” _builder_version=”3.1.1″][\/et_pb_image][et_pb_text _builder_version=”3.1.1″]During these past 15 years, the funds have learned to appreciate the differences between the 20 countries<\/strong> that comprise Latin America. They have evolved from risk-averse funds, investing only in OECD countries (Mexico, Chile), to sophisticated regional players with local teams and offices. There are now six SWF branches with over 100 investment professionals serving the continent.<\/p>\n As funds mature and the search for yield becomes fierce, other countries are starting to gain attention, too. Peru, Colombia, Ecuador, Argentina, Uruguay and Panama are attracting institutional capital<\/strong>. However, funds need to stay cautious as regional challenges remain. When Qatari Diar<\/a> invested $75 million in Gran Paraiso Hotel in Cuba in 2008, the development was supposed to take 3 years<\/a>. Eleven years later, the completion of the property is an unknown. [\/et_pb_text][et_pb_text _builder_version=”3.1.1″]<\/p>\n One way to increase investors\u2019 confidence in the region is by facilitating agreements with domestic SWFs<\/strong>. Today there are seven funds, managing over $ 35 billion that can source opportunities and offer co-investments in Bolivia, Brazil, Chile, Colombia, Mexico, Panama and Peru. This is an increasingly favored route as it minimizes fees paid to asset managers and private equity funds.<\/strong><\/p>\n However, it also increases the exposure to Governance, Risk and Compliance<\/strong>, and the scrutiny from both stakeholders and the public opinion. In this context, trust is crucial, and a proper due diligence has become a key step in the investment process. Whether it is to commit capital to a fund, or to buy a direct stake into an asset, SWFs need to carry out a reputational assessment of possible risks<\/strong> attached to a business partner, including compliance and corporate governance.<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" In a global context of protectionism, Sovereign Wealth Funds and other institutional investors (\u201cSWFs\u201d) continue to play a crucial role in cross-border investments. With over USD 12 trillion of assets under management, they continue to be one of the largest group of asset owners and one of the most active buyers of fixed income, public equities and alternative assets around the world.<\/p>\n","protected":false},"author":4,"featured_media":57332,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[86],"class_list":["post-57331","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ideas"],"acf":[],"yoast_head":"\nFDI in Latin America<\/h2>\n
SWF investments<\/h2>\n
\n[\/et_pb_text][et_pb_text admin_label=”The way forward: Co-investments and Governance” _builder_version=”3.1.1″]<\/p>\nThe way forward: Co-investments and Governance<\/h2>\n