Private banking: Wealth becomes exciting again in Brazil
After so long, private bank clients and even retail investors are no longer happy with the returns from government bonds; instead, they are searching for yield and pushing up the value of risk assets.
A reveller at this year's Rio carnival parade
There is a nervous excitement apparent when talking to Brazil’s private bankers these days. Depending on whom you are talking to – and the bank they represent – the mixture might be more excitement than nerves, or it might be the reverse.
Bankers are responding to the shifting ground of their industry. This has been long anticipated but now it is finally here and clients have noticed. They are no longer satisfied with the returns on offer from stuffing their portfolios full of government bonds.
“We have been building our platform for two decades conscious that the day would come when we would have low real interest rates,” says Sylvio Castro, CIO of international wealth management Brazil at Credit Suisse. “That day has now arrived and Brazilians who want to invest need to think about a more diversified portfolio. We are excited about what we can offer.”
Castro’s point is backed up by statistics from the Brazilian capital markets association Anbima. In the last 12 months, there has been a $19.7 billion outflow from fixed income funds. Equity funds have seen positive inflows of $28.7