What have been the main achievements of CorpBanca Investment Trust over the past few years?
I think that it's important to look at it from both a financial and a market perspective. Regarding the former, we have increased our revenues dramatically over the past three years. Business lines that we consider strategic have generated our revenues. It is important to know that in the fiduciary sector, the license is quite wide. Fiduciaries can engage in any branch of business. In our case, we deal with asset management and custodial services. Also, we support our bank with trust structures that help to strengthen relationships with the existing customers of the bank. Meanwhile, in terms of the market perspective, we believe that the role of fiduciary institutions at the present time is more related to deepening the capital markets. In this sense, we have taken the initiative to find the best scenarios for growth in the asset management business and custodial services. The asset management business line involves the mutual fund business and discretionary portfolios, and the main service is global custody, the principle clients of which are foreign. We have launched an innovative product aimed at retail customers in mutual funds, which is the main responsibility of the asset management industry. In relation to GDP, the level of assets under management in mutual funds in Colombia is 6%. In Chile, the figure is at 17% and in Brazil it is at 60%. Finally, we have become the second largest provider of custodial services in the Colombian market, after Citibank. This is good news for us because it is a very important business line with recurring incomes and revenues.
You present yourself as an exclusive investment alternative in one of your slogans. What is unique about the service you provide, and how do you view the competition?
That slogan refers to an investment fund that we manage, and through it we wish to express that we deliver on our value proposition. When you are selling a customized product, uniqueness is crucial. We offer innovation, high-quality standards, and solutions that are easily adapted to the needs of our customers. We compete on quality, not quantity. We are not interested in the mass business. For competitors in this industry, the model is generally the opposite of our own. We care all about quality, innovation, and the customization of our mutual funds services. With trust structures, the principle objective is to stand out through quality service and innovative products.
Is there a strong understanding of the fiduciary sector in Colombia?
It needs to improve. It is important to further deepen financial education to ensure that all Colombians understand the various facets of the trust industry. One of the principle vehicles for doing this is a massive advertising campaign to convey knowledge about the attributes and characteristics of investment funds. Through financial education, we must continue to ensure that Colombians recognize or know about mutual funds and other fiduciary vehicles. The driver is that we need to improve public education about the industry.
Which companies do you work with mostly?
Currently, we have three business lines: asset management, custodial services, and trust vehicles. We have different clients in these business lines. For example, in mutual funds and asset management, our clients are retailers, small businesses, and universities, which consider our fund to be a good alternative for investing and generating savings. Also, we have corporate clients that consider it to be a good option for cash management, and mutual funds. In custodial services, our clients are mostly global custodians. Our average client is somebody who is interested in portfolio investment in Colombia and who needs a local custodian to carry out activities like safekeeping and settlement, which are the services we provide. For trust services, our clients mostly approach the bank for bespoke fiduciary structures such as Fuentes de Pago, or sources of payment.
CorpBanca Investment Trust is responsible for the investment of resources through different schemes and collective portfolio development. Which segments in the economy possess the greatest potential for development?
The traditional high-value sectors include infrastructure, banking, services, mining, and oil. Now is a good time to think about other sectors or vehicles with different risk profiles. For example, at CorpBanca Investment Trust, we believe in entrepreneurial environments and we think that the venture capital sector, IT, clean technology, healthcare, and other sectors are where we can also find value for our investments.
Does your portfolio involve foreign clients, and are you planning to expand even more in global terms?
Absolutely. Currently, in custody services, the IT sector is a key driver. We are in the middle of making a decision about our use of IT, in the form of more efficient software that will allow us to provide better services. Global custodians are interested in Colombia, and I think that CorpBanca Investment Trust could be at the level to provide the best service, taking into account our investment in IT technology.
Are you looking at markets in the US and Asia, for example?
In terms of investors, we primarily look to the US and to a certain extent Europe, because communicating information and market needs is easier to provide when you are in the same time zone. I think that the US is a good opportunity, although there are also some clients in Europe, principally family offices or private banks in Switzerland or the UK.
What challenges are you facing in the fiduciary sector in Colombia?
I think that we are in the midst of a disruptive climate in terms of the trust industry. Changes in the regulatory environment are affecting the way that we manage the business. From now on, specialization will be preferred over generalization. With this in mind, our sector faces an uncertain period in which trust companies will have to re-think their business models to compete. Sooner or later, we will need to transform to respond to market shifts and adapt our current business model to other marketplaces.
You are now Vice-President on the board of the Fiduciary Association of Colombia. Considering your central role in the sector, what are the most important characteristics needed to succeed in this business?
I have always maintained a consensus position to find common interests among participants in the industry. On the other hand, my mindset was always to look for new business and industries. I put key issues such as innovation on the table, and focused on the shift of mindset needed to exploit environmental conditions. The other participants in the industry give me a confidence vote to lead the industry. In sum, I believe that a sympathetic attitude toward colleagues is key.
How did CorpBanca Investment Trust perform financially over 2012, and how do you expect to perform in 2013?
With regard to the 2013 forecast, we are concerned with profitability and continue to pursue income from greater quality and sustainable recurrence. Recurrence is the most important word in relation to revenue. We need to earn a constant and recurring income. For 2013, we are projecting profitability of $4.5 million and our asset owner management line will be close to $5 billion, mainly in assets under custody. We are also prepared to adapt to new market conditions and continue to provide a differentiated service in all our business lines. This is a challenging time to be a trust company, and we are prepared to take advantage of the opportunities and approach diversification in new ways. Our goal is the long-term maximization of value.
© The Business Year - October 2013