Davivienda Corredores is the product of a merger between four principal brokerage houses. Based in Colombia, the stock brokerage firm has an extensive network that allows it to compete both locally and worldwide. The European caught up with María Teresa Uribe, CEO of Davivienda Corredores, to discuss Colombia’s inward investment appeal and to find out more about the firm’s strategy.
How has Colombia maintained its position as one of Latin America’s key FDI destinations?
María Teresa Uribe: There are several factors that make Colombia an attractive destination for FDI. On one hand, the country has elected a pro-market president that has made advancements on corporate tax reduction, regulation to encourage startups and entrepreneurship, and has added to important plans surrounding infrastructure and fracking. On the other, the Colombian economy has not experienced radical changes in its growth rate along its history and has not fallen into recession since 1999, a big difference in comparison to other important economies in the LATAM region. This shows clear evidence of its resilience.
What do you believe investors are looking for when they invest in Colombia?
MTU: I would highlight factors such as political stability, a wide range of investment opportunities in infrastructure, tourism and energy and, of course, a developing economy. Having said that, Colombia still has so much work to do in all areas since it is still dependent on commodities. However, its middle class has grown considerably over recent decades. In the same way, Colombia has a privileged geographic position that guarantees it ample maritime access and a good connections to North, Central, and South America.
What is the outlook for Colombia’s capital markets in 2020?
MTU: In 2019, the Colombian government received recommendations of the Capital Market Commission (which was created in 2018) to improve how the local market functions by adapting some changes to attract more issuers and investors, and also to enhance the infrastructure available in our country. Because of this, I think that in 2020 and the ensuing years, the capital markets in Colombia will experience positive changes which will make it a much better place to invest. In the same way, since we expect the economy to grow 3.2% in 2020 and to present stable levels of inflation and interest rates, the performance of financial assets could be positive.
Outline the risks and challenges you have overcome when dealing with market volatility?
MTU: Our market is still small, and our economy presents high levels of current account deficit, which is why we are used to volatility in the Colombian peso and the financial assets. The way we overcome and take advantage of this situation is through our highly effective research, strategy, and asset management teams, which have delivered consistent results over time and helped us to capture the opportunities that the markets present. Additionally, by launching new products such as our Real Estate fund and some alliances with international partners that complement our value offering, we have been able to attract new clients and increase our assets under management (AUM).
Why do you think your dynamic approach to portfolio management helps Davivienda Corredorres achieve such good returns?
MTU: I would first say that the asset management, research, and strategy teams at Davivienda Corredorres stand out across Colombia. As such, they have been recognised as one of the best in the country by our institutional and corporate clients. This has taken us to first place in the AUM rankings in Colombia and offers our clients very competitive results in terms of return and volatility. By saying this, I am also highlighting that our group has a strong conviction that a detailed investment process is the key to achieve good returns. That is why our teams oversee a wide coverage of Colombian issuers, have several quantitative models to make decisions, establish rigorous investment policies, and perform a complete risk analysis with the support of our parent group, Grupo Bolívar. Regarding all of this, the return of our portfolios has consistently exceeded the benchmarks in almost every category of asset classes.
What role is digital transformation set to play in Davivienda Corredores’ short-term strategy?
MTU: With more than 25,000 customers, Davivienda Corredores is one of Colombia’s most successful brokers. Over the next three years, the company will expand from offering traditional investment products to offering 100% digital products. Digital products will help Davivienda Corredores earn a reputation as an innovator, alongside its established image as a trusted investor services provider. Currently, we depend on reliance on manual processes, but this will change. The company decided it was time to transform our operations, to become more technology driven. It identified three transformation projects where digital technology will change the way people invest, drive efficiencies, and improve performance. As part of the transformation, more than 20 initiatives are now underway to transform the processes and the cultural shift.
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