Latin America’s richest investors are taking their fortunes to Miami at one of the fastest rates in history, some fleeing regional unrest and others lured by higher returns than they can find at home.
For JPMorgan Chase & Co. and Brazil’s biggest banks, the exodus has generated growth in assets and customers. For Morgan Stanley, not so much.
Wealth under management in Miami from Mexican clients alone has increased about 10% this year at JPMorgan, with similar gains coming from Argentina, Chile, Peru and several other Latin American countries, according to the society.
“It’s amazing how much we’ve grown here in Miami,” Marice Brown, head of private banking in Mexico at the New York-based company, said in an interview. “It was really difficult to attract people to Miami in terms of talent, and now, after the pandemic, it’s the opposite,” she said, adding that this year the bank recruited enough new people to increase its workforce dedicated to Mexicans by 10%. , with approximately 120 employees.
JPMorgan oversees about $180 billion in the region, managed from booking centers in Miami, Houston, New York and Geneva. As investors change their fortunes, the Wall Street firm plans to expand its Latin American private banking business into another floor of a Miami building at 1450 Brickell Ave.
Brazil’s biggest banks share the boom. Banco Bradesco SA increased its Miami-area workforce from 190 to 230 after acquiring a bank in Coral Gables in 2019. Its total wealth held in Florida has doubled to $4 billion since 2019.
And Sao Paulo-based Itau Unibanco Holding SA has seen its wealth under management climb about 10% in the city this year, to about $24 billion. The bank opened more than 1,000 accounts there in 2023. It also hired Fernando Marques from Banque Pictet & Cie SA in Zurich and transferred him this month to Miami to become sales manager of the city’s private bank .
Morgan Stanley was the exception. The Wall Street giant lost clients and bankers in Miami amid a Federal Reserve review of steps the company took to prevent possible money laundering by wealthy clients outside the United States, according to sources close to the matter. The company closed some accounts and stopped opening new ones with Latin American customers, the sources said, asking not to be identified discussing private information.
Morgan Stanley is also changing its policy towards these clients. Starting in the second half of 2024, the minimum account amount required for customers in Panama and Bolivia will increase from $2 million to $10 million, according to a person familiar with the matter. The minimum amount for customers in markets such as Brazil, Chile and Mexico will be cut in half, to $1 million, but the bank will no longer open new accounts for people in Venezuela and Nicaragua, a indicated the source.
A Morgan Stanley spokesperson confirmed the changes to account minimums, saying the bank remains “committed” to its international wealth management business, but has developed targeted client models “that reflect considerations appropriate risks”.
As interest rates remain high in the United States and the Fed may soon begin cutting them, many investors are seeking dollar-denominated corporate bonds or Treasuries, said Brown at JPMorgan. Private credit is also attracting attention.
JPMorgan’s Miami team dedicated to clients in Argentina, Chile, Paraguay, Uruguay, Peru, Ecuador and Bolivia grew by approximately 10% this year, to 70 people, according to Ezequiel Lazcano, head of Latin America South at JPMorgan’s private bank. JPMorgan focuses on Latin American clients with approximately $10 million or more to invest in the company.
“We have seen a significant geographic reallocation of the portfolio towards Miami, linked to the fact that our clients have found more attractive opportunities to multiply their wealth in the United States than in some of their countries,” Lazcano said.
Another boost in Miami’s favor was the shift to left-wing governments in Chile, Peru and Colombia, which triggered a flight of capital from those countries as investors sought safe havens, according to Carlos Gribel, director of Andbank’s brokerage firm in Miami. Andbank attracts $150 million in capital flows annually to its $1.4 billion wealth under management in Miami, mostly from these countries.
“The movement of Brazilians is slower, due to high local interest rates and stable political conditions, but compared to historical outflows we see that they are also increasing the share of offshore investments in their portfolios,” said Gribel.
For other banks, demand from Brazilians has been extraordinary.
“This has been one of the busiest years in our history in terms of clients making exchange rate conversions to invest overseas,” said Fernando Beyruti, global head of the private banking unit of Itau, the largest in Brazil’s national markets.
Percy Moreira, head of international private banking at Itau, said the bank is “seeing an absurd demand from our clients for global investment diversification, mainly now that interest rates outside Brazil have somewhat increase “.
With a $2.3 billion mortgage portfolio, Bradesco is Florida’s leading bank in real estate financing for non-resident individuals in the United States, said Henrique Lima, chief executive officer of Bradesco Bank.
“We will continue to develop this activity, which has good profitability and delinquency rates close to zero,” Lima said. “The Miami market is still hot and local crises in Latin America are helping to increase this type of lending, as many people like to take their money out of their country and invest in something as solid as bricks in the United States . »
Residential properties in the Brickell neighborhood of Miami. (Eva Marie Uzcategui/Bloomberg)
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