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JUAN CARLOS URETA-BAJA-17

SPAIN - Economy

Juan Carlos Ureta

CEO, Renta4

Bio

He is a graduate in the Legal-Economic Speciality (Lawyer-Economist), from the University of Deusto in Bilbao, having obtained the Extraordinary End of Degree Prize and the First National Prize for the Completion of University Studies (1978). State Lawyer (on leave of absence) from the class of 1980, he served in the Ministry of Economy and Finance from 1980 to 1984. Stock Exchange Agent in Madrid, since 1986, number one of his promotion. He was Chairman of the Spanish Institute of Financial Analysts between 2010 and 2016, and Chairman of the Foundation for Financial Studies between 2010 and 2016. He has also been a member of the Board of Directors of the Sociedad Rectora de la Bolsa de Madrid from 1989 to 2019. He has also been a member of the Board of Directors of the Securities Clearing and Settlement Service (SCLV – Iberclear) between 1996 and 2003, member of the Board of Directors of Indra Sistemas between 1998 and 2007, member of the Advisory Board of Lucent Technologies in Spain between 1996 and 2001, and is currently Chairman of Renta 4 Banco, a company he founded in 1986 as a securities company and which today represents the first independent Spanish bank, specialised in asset management and capital markets, listed on the Stock Exchange. He is also a consultant to several Spanish and foreign business and family groups. He is a lecturer in Civil Law at the University of Deusto, 1981/1982. He is the author of numerous publications specialising in legal and financial matters.

"At first, we operated as brokers, dealing with equities and bonds. In 1989 and 1990, we expanded into asset management and wealth management."
TBY talks to Juan Carlos Ureta, CEO of Renta4, about the company’s milestones, client portfolio, and goals for the coming year.
Founded in 1986 as a treasury delegate entity, Renta4 has achieved significant milestones over the years. How would you describe the evolution of the company?

Our aim has always been to transform Spanish savers into investors. We began in the treasury market in 1986, when the Spanish Treasury sought to promote treasury bonds to individuals rather than banks. Consequently, we commenced distributing them and primarily collaborated with insurance companies. In 1988, the capital market reform allowed the establishment of stock companies with physical entities, and Renta4 was the first to be registered. Subsequently, we collaborated with investment funds and formed numerous partnerships with international and national brokers. From there, we expanded our office network across Spain during the 1990s and 2000s. In 1999, with the advent of the internet, we became the first online trading platform in Spain, leading to a significant increase in trading operations and client base. In 2007, we went public through an IPO on the Spanish stock exchange market, and in 2010, we received a full banking license from the Spanish authorities, enabling us to operate as a bank. We decided to follow the model of a specialized bank and focus on investments for all types of investors, because our primary objective has always been to promote investment.

What services does the corporate branch offer and who are its main clients?

At first, we operated as brokers, dealing with equities and bonds. In 1989 and 1990, we expanded into asset management and wealth management. Our venture into the corporate sector occurred subsequently. While we had some involvement with companies from the outset, the formal establishment of the corporate branch took place in 2014. Although this aspect of our operations does not generate the highest income, it is crucial for us. The majority of our income, approximately 45%, is derived from asset management, while 35% comes from brokerage in equity and bonds, with the remainder coming from the corporate sector. We view the corporate area as essential because we anticipate significant transformations within Spanish companies. Spain boasts excellent companies across all sectors; however, their main challenge lies in size. Many of them need to expand and access the stock market, and we can assist them in achieving this goal.

What initiatives does Renta4 undertake to educate companies about financial aspects?

We currently operate 65 offices in Spain, along with additional offices in Latin America and Luxembourg. We continuously collaborate with local companies, educating them about the private equity market, stock market, investors, and the opportunities the capital market presents for company growth and enhancement, which may not be common knowledge. Initially, it was challenging for people to comprehend and embrace what we offered, and occasionally, this still remains the case. Education forms the foundation of our approach. Since 1993, there has been a significant shift in Spain, and now we have numerous partner companies to access the growth market. We oversee 15 distinct corporate operations, including asset acquisitions and sales. Despite considerable changes, more transformations are imminent; this is just the beginning. Our focus in the corporate area will be strengthened from a capital market perspective rather than loans. For example, we provide financing to companies through private equity.

Is your experience transferable to markets such as Chile, Colombia, and others?

Latin America, in general, is still behind. While large companies engage in investments, medium and small companies have yet to enter our private equity realm. There is still much to be accomplished in terms of auditing and accounting discipline.

Renta4’s annual conference on investment strategies convened with prominent companies from various sectors. What were the main highlights of the recent event?

Our focus has always been on the investment world, and as a company, we facilitate direct presentations of companies to investors. The aim is for investors to have direct knowledge of the companies and decide whether they wish to invest in them. Small and medium-sized companies in Spain have a market capacity ranging from EUR100 million-1 billion, whereas globally, these companies range from EUR500 million to EUR4 billion. This segment is often overlooked by analysis firms due to their liquidity. Hence, our idea is for financial directors and presidents to present their companies directly. Renta4 has always specialized in investments and proximity, whether online or in-person. The philosophy of our online platform revolves around bringing the idea directly to the investor. In Chile, we organized a conference on lithium that was attended by all lithium companies in the country, and it was a success.

How has Renta4’s focus on treasury bonds contributed to its growth, particularly considering the changing investment landscape and the diversification of investors’ portfolios over time?

Treasury bonds bring us back to our origins, as they were the cornerstone of our establishment in 1986. We initially focused on distributing treasury bonds to individuals and fostering partnerships with insurance companies. Clients placed their trust in this investment, and we facilitated their participation. Historically, savers did not earn significant returns from keeping money in banks; however, treasury bonds provided them with a profitable alternative. Our entire platform is designed to facilitate the distribution of treasury bonds. This has not posed a challenge for us; instead, we experienced considerable success in this area in 2023, with significant growth. Additionally, we have observed that many investors diversify their portfolios beyond treasury bonds, leveraging our platform’s versatility and their investment experience.

What objectives and priorities does Renta4 have for the current year?

We have a plan for 2022-2027 that encompasses various aspects, including development and growth. We believe there are numerous opportunities in the corporate world. We have dedicated considerable time to public companies but now we will also expand our focus to private companies. This shift is one of the growth objectives outlined in our five-year plan, which also includes expansion into Latin America, with a potential starting point in Mexico. Additionally, we are emphasizing private equity. Since our inception in 2019, we have established over 20 venture capital companies and another 30 companies in partnership. Strengthening our presence in private equity is a key objective. Moreover, we have several projects related to investment funds. We have our own venture capital company and a proprietary capital instrument as an investment offering from our bank. Another significant goal for us is to penetrate the retail market, particularly targeting younger individuals with fewer assets. We have initiated a plan to streamline access, aiming to expand our presence in this sector. We aspire to reach out to individuals who may be unfamiliar with investments and demonstrate that it is not as daunting as perceived. The current challenge lies in the lack of knowledge. Many individuals believe they lack the necessary funds or expertise to participate in investments, and breaking down this barrier is a priority for us.

How does Renta4 plan to break down this particular barrier?

In Chile and Peru, the online aspect was highly beneficial. We conducted a highly successful presentation on ETFs in Chile. In Spain, we need to concentrate on maintaining a presence on social networks and conveying the idea that investing is easy and accessible to everyone, regardless of their savings; that’s part of our slogan. Another growth aspect is linked to the business sector, targeting clients with medium to substantial wealth who are seeking investment opportunities. Our growth has never been fixated on numbers; our goals are centered around concepts rather than numerical targets.

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