Above: Jorge Enrique Cortés, Vice President of Investments
Fiduciaria de Occidente (Fiduoccidente) is a financial services firm, a subsidiary of Banco de Occidente and a member of Grupo Aval (NYSE: AVAL), specialising in asset management through collective investment funds, private equity funds and trusts. Fiduoccidente has a strong track record covering more than 26 years in Colombia and a direct presence in the 10 primary cities of the country. The assets managed by the trust company amounted to $11.2bn on 28 February 2018, $1.3bn of which are collective investment funds and private equity funds; $5.6bn are pension liability trusts and $4.3bn are other managed trusts.
Fiduoccidente is aware of the challenges faced by the financial industry globally and how important it is today to provide customers with a highly specialised service and a strong service experience. That is why it is in the process of implementing its new corporate strategy, which involves three fundamental aspects: development of new products tailored to its clients’ needs; digital transformation; and the change from a product-oriented organisational structure to a market approach.
Fiduoccidente is constantly developing products and services to meet the unique characteristics of each market. Therefore, in 2017, it launched the Fondo de Inversión Colectiva Balanceado Internacional fund, a fund with exposure to the US and Latin American markets, in which investors can have access to investment instruments of fixed income and equity investment instruments (this is the first investment fund in Colombia with a foreign manager). In the first quarter of 2018, with clients who are comfortable with moderate risk exposure in mind, the trust company launched the Fondo de Inversión Colectiva Renta Fija Dinámica fund, which manages clients’ surplus liquidity through investment in fixed income securities, mostly rated from A+ to AA+. The portfolio structure allows for expected returns greater than those of a demand investment fund, assuming a 30-day lock-up period.
The dynamics of product innovation are non-stop. That is why the trust company is working on the launch of its Fondos de Inversión Colectiva Inmobiliarios (FICI) family of funds. Through this product, clients (both companies and individuals) will be given the opportunity to access the real estate market with very low investments and low management costs.
The company has invested its technological efforts in developing and implementing digital initiatives that will conclude in the second half of this year and have a positive impact on the clients’ experience. This includes a new transaction website for ease of consulting product status and carrying out transactions in a quick, easy and safe manner.
The implementation of a new service on Banco de Occidente’s website for customers of the Fondo de Inversión Colectiva Occirenta fund will allow the transfer of resources between accounts and funds in real time. And finally, the startup of a safe new financial messaging service will provide corporate and institutional customers with flexibility and speed in their transactions.
It is important for Fiduoccidente to be at the forefront of technical solutions that allow it to make strategic decisions. That is why it has implemented statistical analysis and data mining tools that help understand client behaviour, segment them and implement loyalty, engagement and service actions to improve their experience with the company.
Fiduoccidente is constantly working to strengthen its culture of innovation. In October 2017, it became the first trust company to partner with Colombia Fintech – a startup guild leveraged on technology to provide financial services.
Change in organisational structure
Fiduoccidente has moved on from the idea of offering individualised products and has developed a strategy based on the needs and objectives of each type of client. Hence, it is focused on four markets: institutional, government, enterprises, and individuals. This transformation has required a change in the organisational structure, which ensures a comprehensive, tailored and timely service for each client. This is how the trust company went from a product-based business structure to one focused on markets and clients, which led to the creation of the Vice Presidency of Individuals and the Vice Presidency of Enterprises (Institutional, Government and Companies).
The organisational structure of Fiduoccidente is led by the Office of the CEO under Mario Andrés Estupiñán. The front office is composed of the Vice Presidency of Individuals and the Vice Presidency of Enterprises, which carry out the competitive strategy and ensure the value proposition defined for each market. The back office is made up of three vice presidents’ offices and three management departments: Vice Presidency of Customer Service, Vice Presidency of Legal Affairs, Vice Presidency of Investments, Department of Finance, Department of Risks and Department of Technology and Information Sources. The company’s development will be led by the Vice Presidency of Strategy and Talent, which is in charge of the fundamental pillars for the future of the organisation, including innovation and human talent.
It is important to mention that the Vice Presidency of Investments is composed of three areas, each with its own level of specialisation: First, there is economic research and strategy, which leads the search and proposal of the main investment opportunities for the different portfolios. Then there is the portfolio managers area, which is responsible for the management and administration of each of the portfolios assigned. Finally, the money desk area, with responsibilities focused on optimally executing the investment orders placed by portfolio managers in the electronic order book.
Maximum risk ratings
Fiduoccidente is the only trust company in Colombia with the maximum counterparty and portfolio management risk ratings, granted by international rating agencies, BRC Standard & Poor’s and Fitch Ratings. At the beginning of 2018, Fitch Ratings assigned the domestic Long and Short-term Counterparty Risk ratings of Fiduciaria de Occidente S.A. at AAA (col) and F1+ (col), respectively – thus ensuring minimal risk to managed funds and their positive performance. These ratings reflect the company’s stability, the professionalism of its employees and the maturity of its processes to efficiently manage the assets of its clients, who are at the very heart of the corporate strategy.