Andean Special Report: AFP Growth Outstrips Market
Peru’s private pension funds are growing as fast as the country’s roaring economy. A dearth of investment opportunity holds them back and new products and regulatory change are needed.
by Ben Miller
As LatAm asset holdings go, the $22 billion that Perus
four private pension funds (AFPs) control may not challenge
Chile ($100 billion) or Mexico ($83 billion). But these growing
investors rake in about $3 billion per year, according to AFP
Integra, and represent 18% of the countys GDP. And they
are still too much for the domestic market to handle.
Private pension funds are the biggest investor in
Perus domestic markets, but the problem is that they are
growing more than the markets, says Gonzalo de las Casas,
CIO at Integra, the largest AFP, with $7.15 billion equivalent
under management as of June. AFPs need to be able to better
re-invest all of the funds they are accumulating. De las Casas
says the solution would largely come from regulatory change and
an increase in domestic investment opportunity.
Despite Perus spectacular growth, elevation to
investment-grade and heightened interest...
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