Credit Suisse to launch Mexican investment advisory business

Wednesday, November 30, 2016

Swiss multinational Credit Suisse is expanding its presence in Mexico, announcing a new consultancy service aimed at investors in the country.

"Credit Suisse considers Mexico a top priority market and reinforces its commitment to the country by increasing its investments and presence; following this line, we are announcing the opening of an investment advisory office," it said in a statement to the press.

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The project, approved by banking regulator CNBV on October 10, will have operations in Mexico's primary economic zones - Mexico City, Guadalajara and "shortly in Monterrey" - and will be led by Nicolás Troillet, global head of private banking in Mexico, a 25-year veteran in private banking and wealth management.

"Today's announcement consolidates our integrated business model, which enables us to gain a deeper understanding of our clients and deliver creative, high value, and customized solutions based on expertise from across Credit Suisse." said Pedro Jorge Villareal, CEO of Credit Suisse's Mexican subsidiary.

"This initiative complements the private banking coverage by providing global and holistic advice with a full open architecture offering (multi-booking centers capacity)."

The bank also commented on other projects in development for Mexico, including roll-out of a local asset management platform, announced in May, with its purpose to "further develop Credit Suisse's real estate platform through the launch of a new investment alternative to provide commercial real estate lending."

The real estate market has seen its ups and downs in recent years, including a struggling construction sector. Real estate firms in Mexico are now particularly exposed to potential, protectionist policies from Mexico's northern neighbor, as highlighted in a recent report from Fitch Ratings.

The ratings agency also announced its concerns for Mexican banks under Trump in another report. Credit Suisse is a bank looking to explore the real estate market and the firm is strongly backing its efforts in Mexico.

"With the election of Donald Trump as president of the United States, we see no reason to delay the launch of the [new real estate platform]. We are moving along fine, and the idea is to launch in December of this year," Credit Suisse asset management executive Raúl Gallegos was quoted as saying last week by Mexican newspaper El Economista.

"The new vehicle will initially issue Real Estate Trust Certificates ("CBFIs") subject to the capital call mechanism, with the objective of creating a portfolio of loans originated directly with internal leverage. Eventually, it could migrate to a permanent capital vehicle, similar to a mortgage REIT, once it has an adequate size and proven performance," read Tuesday's statement.

Gallegos added the bank expects to begin to launch its first loans under the new platform between January and March 2017, ranging from US$40-50mn on average.