Argentine Bankers Launch Columbus Zuma, Look for Acquisitions
By Carolina Millan
Company looks to buy a broker, grow in investment banking
Firm expects capital markets bill to aid foreign investment
Argentine bankers are merging two investment firms in a bid to benefit from growth in the local market.
Local investment firms Columbus Merchant Banking and Zuma Advisors are merging into Buenos Aires-based Columbus Zuma Investment Banking, a group focused on capital markets, trading and wealth management. The partners for the new firm include a group of former Citibank bankers for Argentina and Latin America, and traders from institutions including Lehman Brothers Holdings Inc.
“Argentina’s capital markets had been in a process of destruction up until 2015; they’re now reversing the process,” said Raul Lynch, a partner and formerly of Lehman Brothers and Barclays PLC in a telephone interview. “Now we’re seeing the local market growing and regulators releasing very favorable rules.”
The company is also studying opportunities to buy Argentine broker-dealers as they expect consolidation to halve the number of firms in the sector in the next few years. The executives declined to give further details.
The firm looks to differentiate itself from major banks also vying for deals by looking at those that aren’t in “the largest, most exclusive segment,” Lynch said. The firm recently provided valuations for Mercado de Valores de Buenos Aires and Banco de Valores as part of the demutualization of Bolsas y Mercados Argentinos (BYMA). It also valued Telecom Argentina SA.
Columbus Zuma is also encouraged by the prospect of a productive financing bill, which among other changes will stop securities regulators being able to take over companies based on a minority shareholder’s complaint without a court order.
“The creation of laws that promote order in the market are well regarded by foreign investors, and will help bring long-anticipated investment,” said Alejandro de Nevares, a partner at the firm. “It’s going to be a pillar for a serious market architecture.”
The partners said they’re now recommending peso instruments for the next 90 to 120 days, focusing on Central Bank notes known as Lebacs or other peso assets, and are recommending sovereign dollar bonds due 2022 and 2024 following market volatility.