PANAMA - Finance
Local Managing Director, Lombard Odier (Panama)
Jean-Pierre Wegener has been advising prominent families in Mexico and Central America on asset management for the last 20 years. He has worked with Bain & Company as a Management Consultant in both Costa Rica and Mexico and also as a Private Banker based in Geneva and Panama. Before that, he worked for Swiss Bank Corporation in Corporate Finance in New York and Geneva. He has a degree in Law from Geneva University and an MBA from INSEAD, Fontainebleau.
We set up an office in Panama one year ago to be closer to the local client base. Panama is, and has historically been, a regional hub for financial services in the region. It has strong regulations and legislation for the financial services industry. In addition, there are many qualified people here that we get to work with. All these factors make Panama attractive for us. We have two licenses: a representative office license and an advisory office license. These enable us to provide advisory services to clients regarding investments.
What sets us apart from other wealth managers in Panama is that our owners are also our managers. In any publicly listed bank, the owners are the shareholders while the managers are just managers. The CEOs do not own the bank they manage. Our owners are heavily involved in all the strategic decisions the bank makes. This allows us to take a wider perspective and a longer-term view, which means we are always looking ahead to the next generation. Our clients value this independence. We have been around for more than 200 years, and we want to be in business for another 200 years. This view impacts every level of our organization, in terms of what we want to offer our clients. Everything we do is with a long-term view in mind. People like what we provide and appreciate the stability. That’s an important difference for both our clients and our staff. Besides that, our business just focuses on wealth management for private and institutional clients. We don’t do commercial banking or investment banking, so we minimize the potential of conflicts of interest that result from being involved in such businesses. That’s another key difference.
Lombard Odier is a family business, so we strongly relate to family businesses in Panama and Latin America. Among many important organizations is the Family Business Network, which our firm is a member of and which meets once a year with all the national chapters. The organization is all about families exchanging experiences, and providing a platform for them to interact. We have extensive experience in this field, having funded the IMD-Lombard Odier Global Family Business Award since 1996 as well. We also co-wrote books on the subject with John Ward, clinical professor of Family Enterprises at Kellogg School of Management.
We manage portfolios based first and foremost on our clients’ appetite for risk. They have the whole world in which to invest, so we offer them recommendations on cash, bonds, equities, structured products, and commodities so that they can invest in a whole range of products, depending on the macroeconomic environment. We then manage their portfolios with the fundamental conviction that we must first conserve wealth. The families we work with are concerned about passing their wealth to future generations. The safety of our clients’ wealth is our primary concern.
Panama has an excellent system in place, and strong reflexes, too. They have the right attitude. They are looking in the right direction, and they want to be significant international players in the financial sector. It is an open country, and always has been. Panamanians want to be open and to adapt, and they want to be key players in international finance. They are making good progress in this direction.
The separation of the superintendence of banks and of Marcado de Valores is the main difference. In Switzerland, for example, you have the Financial Market Supervisory Authority (FINMA), which is the overseeing body that covers all financial issues.
Though we don’t see the market growing as strongly as it did last year, we anticipate single-digit growth. Our business always involves a combination of existing assets and new assets, and the growth of those assets depends largely on our ability to match portfolio management with clients’ needs and ambitions.
Real estate could be an issue here, as in many markets. There was 29% growth in construction over 2013. Much of the growth was not achieved by Panamanians, but by money invested by foreigners. A lot of the growth depended on factors that Panamanians did not directly control. Depending on, for example, the political situation in Venezuela, those living in Panama might move back there. We hear that the construction sector will slow down in 2015, as well. If there is a slowdown, traditional banks may be exposed to the risks involved.
© The Business Year – April 2014
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