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Thursday, February 29, 2024

JPMorgan Amongst Winners as Latin American Wealth Flocks to Miami


(Bloomberg) — Latin America’s wealthiest buyers are taking their fortunes to Miami at one of many quickest clips in historical past, with some fleeing regional turmoil and others lured by yields increased than they will discover at residence.

For JPMorgan Chase & Co. and Brazil’s largest banks, the exodus has generated asset and shopper progress. For Morgan Stanley, not a lot.

Wealth underneath administration in Miami from Mexico purchasers alone elevated by roughly 10% this yr at JPMorgan, with related features coming from Argentina, Chile, Peru and a number of other different Latin American nations, based on the agency.

“It’s unbelievable how a lot we’ve grown right here in Miami,” Marice Brown, head of Mexico non-public banking on the New York-based firm, stated in an interview. “It was actually onerous to convey folks to Miami when it comes to expertise, and now after the pandemic it’s the opposite method round,” she stated, including that this yr the financial institution recruited sufficient new folks to spice up its workforce devoted to Mexicans by 10%, to about 120 staff.

JPMorgan oversees about $180 billion from the area, managed from reserving facilities in Miami, Houston, New York and Geneva. As buyers shift their fortunes, the Wall Road agency plans to develop its Latin American private-banking enterprise into one other flooring in a Miami constructing at 1450 Brickell Ave.

Brazil’s largest banks are sharing within the growth. Banco Bradesco SA elevated its headcount within the Miami space to 230 from 190 after buying a financial institution in Coral Gables in 2019. Its complete wealth underneath custody in Florida has doubled to $4 billion since 2019. 

And Sao Paulo-based Itau Unibanco Holding SA noticed its wealth underneath administration climb about 10% within the metropolis this yr, to roughly $24 billion. The financial institution opened greater than 1,000 accounts there in 2023. It additionally employed Fernando Marques from Banque Pictet & Cie SA in Zurich and moved him to Miami this month to change into industrial head for personal banking within the metropolis.

Morgan Stanley has been the exception. The Wall Road large has been dropping purchasers and bankers in Miami amid a Federal Reserve evaluation of the agency’s measures to forestall potential cash laundering by wealth purchasers from exterior the US, based on folks aware of the matter. The agency closed some accounts and stopped opening new ones from Latin American purchasers, the folks stated, asking to not be recognized discussing non-public info. 

Morgan Stanley can also be altering its coverage concerning these purchasers. Beginning within the second half of 2024, the required account minimal for purchasers from Panama and Bolivia will improve to $10 million from $2 million, based on an individual aware of the matter. The minimal for costumers in markets together with Brazil, Chile and Mexico will fall by half to $1 million, however the financial institution will now not open new accounts for folks in Venezuela and Nicaragua, the individual stated.

A Morgan Stanley spokesperson confirmed the adjustments to the account minimums, saying the financial institution stays “dedicated” to its worldwide wealth enterprise, however has developed focused shopper fashions “that mirror acceptable threat issues.”

Learn Extra: Morgan Stanley’s Wealth-Administration Arm Attracts Fed Scrutiny

With rates of interest nonetheless excessive within the US, and with prospects the Fed could quickly begin to reduce them, many buyers are in search of dollar-denominated company bonds or Treasuries, Brown at JPMorgan stated. Personal credit score can also be attracting consideration.

JPMorgan’s group in Miami devoted to purchasers from Argentina, Chile, Paraguay, Uruguay, Peru, Ecuador and Bolivia has expanded about 10% this yr, to 70 folks, based on Ezequiel Lazcano, head of Latin America south at JPMorgan’s non-public financial institution. JPMorgan focuses on Latin American purchasers with about $10 million or extra to speculate with the agency.

“We noticed a major geographic portfolio reallocation to Miami associated to the truth that our purchasers have discovered extra compelling alternatives to multiply their wealth within the US than in a few of their international locations,” Lazcano stated. 

One other impetus for the Miami push has been a shift to leftist governments in Chile, Peru and Colombia, which sparked a capital flight from these nations as buyers looked for protected havens, based on Carlos Gribel, head of Andbank’s brokerage agency in Miami. Andbank has been attracting $150 million of inflows a yr to its $1.4 billion wealth underneath administration in Miami, largely from from these nations.  

“The motion from Brazilians is slower, due to excessive native rates of interest and steady political circumstances, however when in comparison with historic outflows we see that also they are rising their share of offshore investments of their portfolios,” Gribel stated.

For different banks, demand from Brazilians has been extraordinary. 

“This has been one of many extra energetic years ever in our historical past when it comes to purchasers doing exchange-rate conversions to speculate overseas,” stated Fernando Beyruti, international head of Itau’s private-banking unit, the largest in Brazil’s onshore markets. 

Percy Moreira, head of worldwide non-public banking at Itau, stated the financial institution is “seeing absurd demand from our purchasers for international funding diversification, primarily now that rates of interest exterior Brazil have elevated a bit.” 

With a mortgage portfolio of $2.3 billion, Bradesco is the lead financial institution in Florida within the enterprise of financing actual property properties for non-resident people within the US, stated Henrique Lima, chief govt officer at Bradesco Financial institution. 

“We’ll continue to grow this enterprise, which has good profitability and delinquency charges near zero,” Lima stated. “The Miami market remains to be sizzling, and native crises in Latin America assist to extend any such lending, since many individuals prefer to take their cash out of their nation and put money into one thing as stable as bricks within the US.”

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