Latin American ultra-high net worth (UHNW) business executives are keen on opportunities for mergers and acquisitions, with many likely to pursue deals in the short-term, according to a new report from Campden Wealth Research, in partnership with Morgan Stanley.
The newly published “Risk & Return in Latin America” finds that 56% of executives surveyed perceive merger and acquisition (M&A) opportunities in Latin America to be excellent or very good; with 43% extremely or very likely to pursue opportunities in the next 12 months.
Interestingly, their attitudes are more positive about opportunities inside LatAm than outside the region.
Interest in M&A is driven in part by a generational dynamic in which the family principal, generally the patriarch, is reaching retirement age with no succession interest among his children, the survey finds, as well as by opportunities linked to outflows of foreign direct investment.
“This is to our knowledge the first survey of its kind,” said John Moore, Head of Latin America for Morgan Stanley. “It finds that successful family business owners see themselves as uniquely positioned versus international competitors to grow within the region. They wish to do so via mergers and acquisitions, and also are seeking advice on opportunities in private equity, venture capital and joint ventures.”
Business leaders are looking to expand despite a muted economic outlook for the region and the perception of significant risks. Risks perceived as extremely or very important include personal/business reputation (93%), political/country risk (89%), capital risk (84%), inflation rate risk (81%) and family succession (81%).
Our survey found that heads of family businesses are actively seeking to improve their ability to manage the risks they can control. However, they also perceive a cultural change in the region, with younger generations increasingly educated to international standards and looking to pursue sustainable businesses. We found a growing interest in philanthropy among UHNW families, notably in education, healthcare and the environment,” said Dominic Samuelson, Chief Executive Officer, Campden Wealth.
In wealth management, 41% of survey respondents list wealth preservation as a key objective, followed by 30% citing growth. The family executives would like access to more expertise in foreign exchange risk and knowledge of offshore funds, as well as in lending and capital markets activity.
“These family executives are being called upon to both preserve family wealth as the primary family decision-maker, while simultaneously growing their business as the corporate manager. Outside advisors can provide a valuable service by helping to manage the conflict inherent in these dual responsibilities,” said James Jesse, Head of International Wealth Management at Morgan Stanley.
Survey methodology: 45 UHNW family business executives domiciled in Argentina, Brazil, Chile, Mexico and Venezuela were surveyed between July and November 2015. They represent over U.S. $1.5bn in personal wealth, U.S. $3.1bn of 2014 business revenue, and reflect a diverse range of industries. To add context to the quantitative component of the study, 12 in-depth qualitative interviews with Latin American business executives, professionals, experts, entrepreneurs, and family business consultants were conducted.
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About Campden Wealth
Campden Wealth is the leading independent provider of information, education and networking for generational family business owners and family offices globally in person, in print, via research and online.
Campden Research supplies market insight on key sector issues for its client community and their advisors and suppliers. Through in-depth studies and comprehensive methodologies, Campden Research provides unique and proprietary data and analysis based on primary sources.
Campden Wealth also publishes the leading international business titles CampdenFB, aimed at members of family-owned companies in at least their second generation and CampdenFO, the international magazine for family offices and private wealth advisors. Campden Wealth further enhanced its international reach and community in 2011 with the acquisition of the Institute for Private Investors (IPI), the leading membership network of private investors in the United States, founded in 1991 and with the establishment of Campden Family Connect PVT. Ltd a joint venture with the Patni Family in Mumbai, India in 2015.
To learn more please visit www.campdenresearch.com.
About Morgan Stanley
Morgan Stanley (NYSE: MS) is a leading global financial services firm that provides investment banking, securities, wealth management and investment management services. With offices in more than 43 countries, the Firm’s employees serve a worldwide clientele of corporations, governments, institutions and individuals. Morgan Stanley’s Wealth Management division oversees approximately $2 trillion in client assets, including over $90 billion in assets under management for nonresident clients as of December, 2015.
Operating within Wealth Management, Morgan Stanley International Wealth Management (IWM) offers a highly specialized set of capabilities to help address the unique financial needs of clients residing outside the United States. With approximately 400 International Client Advisors, primarily working from 12 U.S.-based International Wealth Offices, IWM serves clients from over 60 countries across the Americas, Europe, Asia and the Middle East.
Morgan Stanley IWM clients include some of the world’s most prominent individuals, families, businesses, foundations and corporations. They have diverse goals, complex challenges and an exceptional range of personal and cultural preferences. Some are entrepreneurs whose wealth is closely tied to the companies they founded and others are executives whose companies Morgan Stanley has helped take public. The goal is to help each client navigate the complexities of managing significant wealth and pursue the goals they have set for themselves, their families and their communities.
For further information about Morgan Stanley, please visit www.morganstanley.com.
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