Perhaps predictably, foreign direct investment (FDI) into Latin American financial centres tends to gather in the region’s largest economies (Brazil and Mexico), the most stable (Chile), and the most promising (in this case Colombia and Argentina).
The main financial hubs of these countries attracted more than $200m each between January 2014 and December 2016, with Brazil's São Paulo and Rio de Janeiro bringing in $2.58bn and $1.14bn, respectively, according to estimates by greenfield investment monitor fDi Intelligence. The two cities lead the ranking of top 20 Latin American financial centres by financial services FDI in that period.
Mexico City is third with $649.5m, a total that, while large, is only half that of Rio de Janeiro. Meanwhile, there is a steep drop from there to fourth position, Santiago’s $295.9m, and a more gradual slope to the lower places. Following investment values down the ranking paints a familiar picture, where the largest sums are concentrated at the top of the list. Conversely, value distribution in the ranking of largest financial centres investing in Latin America appears more diluted.
That table is led by New York, with $929.8m, followed relatively closely by London and Toronto. Interestingly, Buenos Aires appears in fourth place, with $442.2m. Argentine peer-to-peer lender Afluenta is responsible for all six investments as it expands across Latin America and sets up offices in Brazil (its largest venture), Mexico, Colombia, Peru, Uruguay and Chile.
Caracas is the only other Latin American centre in the list of top investors, with $384.6m. Similarly to Buenos Aires, all investments originated from one institution, Banco Etcheverria. This is owned by Venezuela’s Banesco Banco Universal, which is expanding in Brazil, Mexico, Argentina and Panama.
Total estimated financial services FDI into Latin America, including centres outside of the ranking and investments where an exact destination could not be pinned down, exceeded $10bn in the three years to the end of 2016.
