Thursday, 19 Apr 2018
Business

With financial muscle for acquisitions: David Buenfil

In 2016, Old Mutual globally announced that it was going to undertake a strategic analysis (carried out by Goldman Sachs and other global banks) around a separate management, and in that evaluation, they decided to focus on their country of origin, South Africa, and focus your growth strategy in Africa.

Old Mutual’s focus shifted from an emerging market company to a company focused on Africa, “that was the determination of the Board of Directors and they saw a way to detonate the price of their stock,” said David Buenfil, CEO of Old Mutual for Latin America and Asia.

The road has been long. Old Mutual sold its operations in India, the United States, England, and even decided to reduce its shares in the South African bank to 20%, only to participate in the insurance and investment management markets in the African continent.

“A few months ago, the company took the decision to review the course of operations in Latin America, since they are profitable operations, which have had good growth, but which are far from the African continent in a managerial way and which do not go according to their new strategy, “said Buenfil.

Although the context was uncertain for operations in the region, in March of this year, CMIG International, a registered financial company domiciled in Singapore, signed a contract with Old Mutual to acquire 100% of its operations in Latin America. “That was an operation like falling from the sky, which gives us an opportunity for growth.”

Knowing the new ally David Buenfil is in charge of operations in Latin America and also in Asia. “Being in India and in China, I came across the CMIG group, which has a great reputation and wants to be like the Warren Buffett of Asia, where it is a financial holding, which has several divisions.”

Currently, CMIG is the second largest group of global aviation, they have real estate businesses (they own an important part of Shanghai), renewable energy (the largest photovoltaic panel farm in the world) and they participate in companies of: health, technology , of the financial sector and leasing.

The Chinese holding company has 40,000 million dollars of assets and is formed by the 60 leading private companies in China. And they have a Global Advisory Council, where they participate: Angus Deaton, Nobel laureate of the Economic Sciences of 2015, Shaukat Aziz, former prime minister of Pakistan, Marek Belka, former prime minister of Poland, Dominique de Villepin, former prime minister of France , Ronald Dennis, CEO of McLaren Technology Group, Stephen A. Orlins, president of the National Committee of US-China Relations, Romano Prodi, former president of the European Commission, former prime minister of Italy, among others.

In 2016, CMIG International acquired Sirius International Insurance Group, one of the leading Swedish insurance and reinsurance companies that currently has clients from 142 locations in the world, including: United States, Sweden, England, Singapore, Switzerland and Canada.

The Asian company liked the Assett Management and Old Mutual insurance business model in Latin America. Therefore, CMIG International, based in Singapore, which has an orientation towards the global financial sector, is the division that makes the offer for the operations, which include: Mexico, Colombia and Uruguay.

David Buenfil, CEO of Old Mutual for Latin America and Asia, said he did not know the figure of the operation; however, Reuters reported that the transaction would have an exchange of 300 million dollars.

CMIG strategy in AL CMIG International takes Old Mutual Latin America as its first investment in the region, to be the spearhead.

“We are delighted. We went from a situation where there was uncertainty not to be the core of the business and that there was no possibility of regional growth, to be the entry into Latin America. We came across CMIG that brings all the desire of the world to grow, and that also have the capital, they want to keep the team. As a financial holding, they want to buy good companies and support the current management and administrative team in their expansion strategy, “said David Buenfil.

The CMIG International agreement establishes that the transaction includes the operation of the multi-company financial platform, which includes pension, life insurance, mutual funds, broker-dealer and investment advisory business with a total of assets under management for more than 13,500 million of dollars in Mexico, Colombia and Uruguay. And the Skandia brand, for that reason, the Asian conglomerate decides the return of the Skandia brand.

“Everything is subject to regulatory approvals this may take a little time, because for the transaction to be closed it is limited to authorization in Colombia, Mexico and Uruguay and we can not change the brand until the operation is approved. At this time, we continue under the brand Old Mutual who continues to support the operation, but we hope to be again supported by CMIG Skandia … Our growth had been organic, and this opens the door to explore inorganic growth, through new acquisitions ” , mentioned David Buenfil.

The CEO of Old Mutual for Latin America and Asia estimates eight to 12 months to obtain regulatory approvals.

“Customers are going to be part of that important growth and we will continue our personal finance and long-term patrimonial savings training project,” concluded David Buenfil.

patricia.ortega@eleconomista.mx

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