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UBS has three main businesses: wealth management, asset management, and investment banking. How important are each of these divisions here in Mexico?

Right now UBS has 177 people in Mexico, 162 are based in Mexico City. We have two offices in Guadalajara and Monterrey with 8 and 7 people in each, respectively. About two-thirds of those 177 people are focused on wealth management. The office is primarily focused on wealth management and that’s the area where we have seen the most growth. We opened our on shore wealth management capabilities 5 years ago and now we manage about $5 billion. That is the growth we have seen. Five years ago we had less than 40 staff. In addition to wealth management we have a significant investment bank presence in Mexico. It is divided into three areas: Corporate Client Services (CCS), which is focused on corporate clients and their financing and advisory needs; the equities business, on average we are responsible for 5-6% of the volume of the Mexico stock market everyday comprised of sales people, analysts and traders; the third part is the fixed income business.

What is the profile of the Mexican investor?

For UBS our focus is on very affluent customers. We look for customers with complex, sophisticated financial needs. Our clients tend to be heterogeneous. We have conservative clients that focus on fixed-income investments. We also have more opportunistic clients that are more aggressive in their investment style. They have significant exposure to equity or single stocks.

A third of your activities are related to investment banking. What is your outlook on that segment?

Last year was slow in Mexico in investment banking in general. That reflects on the uncertainty and volatility of emerging markets. We are seeing things pick up right now quite significantly. Last week there was the first IPO from Unifin, which is a leasing company. We were one of the book runners in that transaction. A number of different IPOs are coming into the market. After 12-18 months where things have been quiet you will see a pickup in activity and it will become more apparent as the year goes on. We have seen important mergers; Soriana and Comercial Mexicana have merged. On the equity side we have seen a significant increase in business this year. Volumes from the beginning of the year were quite robust. With interest rates as low as they are, local investors in particular are looking to increase their exposure to equities. In the fixed income segment we have also seen a pickup in business, again reflecting a gradual improvement in the economy.

40% of Mexican GDP is represented in the stock exchange. What are the hindrances that Mexican companies still face with the stock market?

There are a number of reasons why stock market penetration is lower in Mexico than other parts of the world. Firstly, you have big sectors like energy and electricity and water that until now have been off limits to the stock market because they are owned by the government. That is beginning to change with the liberalization of the energy and electricity sector. A second reason is multinational companies are starting to be very dominant in Mexico because of the proximity to the Untied States; Proctor & Gamble, Unilever, Avalon, and GM are all present. Then you have the fact that a lot of companies are family owned and not institutionally managed; they want to be, but are not ready to be in the stock market. It is a family-oriented culture.