Chilean investment bank Celfin Capital and Goldman Sachs are starting a new alliance as they aim to take a leading position in the growing local derivatives business and help the Chilean market become more liquid, transparent and sophisticated.
"The pension funds are very large investors locally and have growing derivative needs," says a senior banker at Celfin Capital. "But also there are tremendous needs from the corporate sector to have hedging mechanisms both in currencies and interest rates. We are starting to see growing flows from both sides and plan to make a market out of it."
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Celfin already has a team of five dedicated to growing its derivatives platform locally. This team is providing the local knowledge and client base, and the Goldman team, based in New York, is offering its experience in structuring and developing specific products to the partnership. The banker adds: "Even though I think there will be a significant increase in the use of these products in the short term, the product offering will grow gradually. The pension funds and corporates will need time to understand these complex tools.