Scotiabank is buying 50% of BBVA’s Peruvian pension fund management business, AFP Horizonte, for $260 million.
As part of the deal, Canada’s third-largest bank by assets and SURA Asset Management, which has acquired the other 50% of AFP Horizonte, will jointly manage the company through a transition period.
Upon final regulatory approval, the company will be divided and Scotiabank will integrate its 50% share of this business with its existing Peruvian pension fund management business, Profuturo AFP.
“Pension fund management is a business of strategic importance for global wealth management’s international operations and an area where we see great potential for future organic growth in Latin America,” says Barb Mason, the bank’s executive vice-president of global wealth management. “This acquisition will allow us to quickly increase the scale of our existing Profuturo AFP business and become a bigger presence in this growing segment.”
With US$9 billion in assets under management (AUM), AFP Horizonte is the third-largest pension fund manager in Peru.
Profuturo AFP was acquired by Scotiabank in 2008 and is Peru’s fourth-largest pension fund manager with 15% market share. The company currently has US$5.8 billion in AUM.
After the integration of this acquisition, Profuturo AFP will increase AUM to about US$10.3 billion, bringing its market share to 27%, and will serve 1.9 million customers.