Colombia Wealth Report 2015

With Colombia’s supervised financial system and early government measures such as the privatization of public assets, the financial crisis of 2008 only had a minor impact on the country. The upgrade of Colombia’s government debt to investment grade also helped the country to attract high levels of investment in 2013 and 2014. Colombia has transformed into a country with a strong political system, reduced crime rates and rising levels of foreign investment.

The rise of private banking in Colombia has led to the introduction of a range of products and services, such as investment banking, probate and estate settlement, real estate advisory, financial planning, asset management, insurance, retirement and business services. This has helped Colombian banks to become more competitive than neighboring countries, especially Argentina where poor reliability and inefficiency have hampered the development of financial services. In 2014, Argentina defaulted on its debt for the second time in 13 years, leading to economic contraction and forcing the government to curb imports as availability of US dollars decreased.

Developments in regulation as introduced by the Colombia’s Ministry of Finance in September 2014 to move towards Basel lII capital requirements for both domestic and internal private banks are expected to help Colombian banks to strengthen their capital bases, reducing market and operational risk. Colombian regulatory authority Superintendencia Financiera de Colombia issued a series of regulations over several years aimed at introducing capital rules for the banks, allowing the use of instruments with greater loss-absorption capacity; moreover Colombian banks should maintain a minimum 9% of total regulatory capital, where basic capital should be at least 4.5%.

Scope

• An independent market sizing of Colombian HNWIs across five wealth bands.

• Analysis of Colombian HNWI volume, wealth and allocation trends from 2010 to 2014.

• A detailed forecast of HNWI volume, wealth and allocation to 2019.

• A breakdown of the asset allocations of Colombian HNWIs and UHNWIs across 13 asset classes.

• A geographical breakdown of all foreign assets held by Colombian HNWIs.

• An alternative breakdown of liquid vs. investable assets.

• The total of UHNWIs in major Colombian cities, in addition to the number of wealth managers providing services to these respective local markets.

• City ratings of wealth management saturation and potential.

• Analysis of the overall size of Colombia’s wealth management industry.

• The largest private banks by assets under management.

• Detailed wealth management and family office information.

Key Highlights

• What is the total number of HNWIs in Colombia? How much wealth in US$ billion do they currently hold?

• What has been the percentage increases in Colombian HNWI numbers in 2013 and 2014?

• How substantial is the forecast growth in the number of Colombian HNWIs by 2019? By what percentage is HNWI wealth expected to grow in the same forecast period? How much will this be in total in US$ billions?

Reasons to buy

• Investigate a comprehensive analysis of the private banking and wealth management sector in Colombia and deliver your strategy to clients based on the most current market information.

• Evaluate HNWI numbers and volumes in each major Colombian city to target prospects precisely and ensure the cost efficiency of your operations.

• Assess the proliferation of family offices in the Colombian wealth market to identify where the competitive balance offers you the best chance to implement your expansion strategy.

• Gain an understanding of the competitive landscape of the Colombian wealth management market to identify the key regulations and cultural variations that might potentially have negative repercussions for your competitive edge.

Companies mentioned

Corporación Financiera Colombiana SA, Bancolombia Private Banking, J.P. Morgan Corporación Financiera SA, Citibank – Colombia SA, Scotia Bank Colombia, Credit Suisse, Banco Comercial AV Villas SA, UBS and Deutsche Bank.

Table of Contents

1 Introduction

1.1 Details of this Report

1.2 Definitions

2 Executive Summary

3 Colombia Key Facts

4 Distribution of Wealth in Colombia

4.1 HNWI Volume and Wealth Trends

5 Findings from the WealthInsight HNWI Database

5.1 Trends in HNWI Wealth to 2019

5.1.1 HNWI trend analysis

5.1.2 Wealth band trends

5.1.3 Demographic breakdown of HNWIs

5.1.4 HNWIs – job titles

5.1.5 HNWIs – industry breakdown

5.1.6 HNWIs – industry performance

5.1.7 HNWIs – breakdown by city

5.1.8 HNWIs – city performance

5.1.9 HNWIs – city population densities

5.1.10 HNWIs – city forecasts

5.2 UHNWIs

5.2.1 UHNWI volume trend analysis

5.2.2 UHNWI wealth trend analysis

5.2.3 Demographic breakdown of UHNWIs

5.2.4 UHNWIs – industry breakdown

5.2.5 UHNWIs – city breakdown and performance

5.3 UHNWIs – Billionaires

5.3.1 Billionaire volume trend analysis

5.3.2 Billionaire wealth trend analysis

5.3.3 Billionaire per capita net worth trend analysis

5.3.4 List of billionaires

5.4 UHNWIs – Centimillionaires

5.4.1 Centimillionaire volume trend analysis

5.4.2 Centimillionaire wealth trend analysis

5.4.3 Centimillionaire per capita net worth trend analysis

5.5 UHNWIs – Affluent Millionaires

5.5.1 Affluent millionaire volume trend analysis

5.5.2 Affluent millionaire wealth trend analysis

5.5.3 Affluent millionaire per capita net worth trend analysis

5.6 Core HNWIs

5.6.1 Core HNWI volume trend analysis

5.7 Core HNWIs – Mid-Tier Millionaires

5.7.1 Mid-tier millionaire volume trend analysis

5.7.2 Mid-tier millionaire wealth trend analysis

5.7.3 Mid-tier millionaire per capita net worth trend analysis

5.8 Core HNWIs – Lower-Tier Millionaires

5.8.1 Lower-tier millionaire volume trend analysis

5.8.2 Lower-tier millionaire wealth trend analysis

5.8.3 Lower-tier millionaire per capita net worth trend analysis

6 Analysis of Colombian HNWI Investments

6.1 Analysis by Asset Class

6.1.1 Trends in alternative assets

6.1.2 Trends in ‘art, wine and wheels’

6.1.3 Trends of investment in real estate

6.1.4 Trends of investment in cash and deposits

6.1.5 Trends of investment in fixed-income

6.1.6 Investment trends in equity

6.1.7 Investments trends in business interests

6.2 Analysis of Foreign Investments

6.2.1 Investments in Europe

6.2.2 Investments in North America (including the US, Mexico and the Caribbean)

6.2.3 Investments in the Asia-Pacific

6.2.4 Investments in South America

6.2.5 Investments in the Middle East

6.2.6 Investments in Africa

6.3 Alternative Breakdown: Liquid vs Investable Assets

6.4 Analysis of Colombian UHNWI Investments

7 Competitive Landscape

7.1 Additional Components of the Wealth Sector in Colombia

7.1.1 Domestic private banks

7.1.2 Foreign Private Banks

7.1.3 Family offices

7.2 Key Drivers

7.2.1 COP to US$ exchange rate

7.2.2 Real GDP growth

7.2.3 Per capita GDP

7.2.4 Domestic market capitalization

7.2.5 Commodity index

7.2.6 Foreign direct investments (FDI) – inflows and outflows

7.2.7 Inflation rate

7.2.8 Interest rate

7.2.9 Balance of payments

7.2.10 Government deb

7.2.11 Stock market performance

7.3 Wealth Breakdowns

8 About WealthInsight

List of Tables

Table 1: HNWI Wealth Band and Group Definitions

Table 2: Colombian HNWIs – Volume Distribution (%), 2014

Table 3: Colombian HNWIs – Wealth Distribution Wealth Pyramid (%), 2014

Table 4: Colombian HNWIs – Industry Performance (%), 2010–2014

Table 5: Colombian HNWIs – Cities, 2014

Table 6: Colombian HNWI Growth in Top Cities (Thousand), 2010–2014

Table 7: Colombian HNWIs Population Density in Major Cities 2014

Table 8: Colombian HNWIs in Top Cities (Thousand), 2010–2019

Table 9: Colombian HNWIs – Growth Rates for Top Cities (%), 2010–2019

Table 10: Colombian HNWI Source of Wealth (%), 2014

Table 11: Colombian UHNWI Gender Performance (%), 2010–2014

Table 12: Colombian Volume of UHNWI in Top Cities, 2010–2019

Table 13: Colombian UHNWIs Growth Rates for Top Cities (%), 2010–2019

Table 14: Colombian Billionaires Market Overview (Volume and US$ Billions) 2010–2019

Table 15: Colombian Top Billionaires (US$ Billion), 2014

Table 16: Colombian Billionaire Wealth Growth (US$ Billion), 2010−2014

Table 17: Colombian Centimillionaires Market Overview (Volume and US$ Million/Billion), 2010–2019

Table 18: Colombian Affluent Millionaires Market Overview (Volume and US$ Million/Billion), 2010–2019

Table 19: Colombian Mid-Tier Millionaires Market Overview (Volume and US$ Million/Billion), 2010–2019

Table 20: Colombian Lower-Tier Millionaires Market Overview (Volume and US$ Million/Billion), 2010–2019

Table 21: Colombian Allocations of HNWI Assets (%), 2010–2019

Table 22: Colombian HNWIs − Holdings Growth (%), 2010–2019

Table 23: Colombian HNWI Alternative Asset Composition (%), 2010–2019

Table 24: Colombian HNWI Trends of Investments in Alternative Assets (%), 2010–2019

Table 25: Colombian Trends in ‘Art, Wine and Wheels’, 2010–2014

Table 26: Global Prime Real Estate Prices per m2 (US$), 2014

Table 27: Colombian HNWI Foreign Investment Allocations (%), 2010–2019

Table 28: Colombian HNWI Liquidity Breakdown (US$ Billion), 2010–2019

Table 29: Colombian HNWI Liquidity Breakdown (%), 2010–2019

Table 30: Colombian UHNWI Allocations and Share of HNWI Assets (%), 2014

Table 31: COP to US$ Exchange Rate, 2010–2019

Table 32: Colombian Real GDP Growth (%), 2010–2019

Table 33: Colombian GDP Per Capita (US$), 2010–2019

Table 34: Colombian Domestic Market Capitalization (US$ Billion), 2010–2014

Table 35: Colombian Commodity Indices, 2010–2019

Table 36: Colombian Foreign Direct Investments (US$ Billion), 2010–2019

Table 37: Colombian Inflation Rate (%), 2010–2019

Table 38: Colombian Money Market Rate (%), 2010–2019

Table 39: Colombian Balance of Payments (US$ Billion), 2010–2014

Table 40: Colombian Government Debt as a Percentage of GDP (%), 2010–2019

Table 41: Colombian Stock Market Performance (Index), 2010–2014

Table 42: Colombian HNWI Wealth vs. GDP Ratio (%), 2010–2019

Table 43: Colombia – Appendix One

Table 44: Colombia – Appendix Two

List of Figures

Figure 1: HNWI Wealth Band Definitions

Figure 2: Map of Colombia

Figure 3: Colombian Asset Price Performance (%), 2010–2014

Figure 4: Colombian HNWI Performance (US$ Billion and HNWI Volume), 2010–2019

Figure 5: Colombian vs Global HNWIs (%), 2010–2019

Figure 6: Colombian HNWIs – Growth Factor Correlation, 2010–2014

Figure 7: Colombian HNWIs – Wealth Pyramid (Volume Distribution), 2014

Figure 8: Colombian HNWIs – Wealth Pyramid (Wealth Distribution), 2014

Figure 9: Colombian HNWIs – Age Distribution (%), 2014

Figure 10: Colombian HNWIs – Job Titles (%), 2010–2014

Figure 11: Colombian HNWIs – Distribution by Industry (%), 2014

Figure 12: Colombian HNWIs – City Performance (%), 2010–2014

Figure 13: Colombian HNWIs – Volume of HNWIs by City (Thousand), 2010 and 2014

Figure 14: Colombian HNWIs – City Forecasts (%), 2015–2019

Figure 15: Colombian Volume of HNWIs by City (Thousand), 2015–2019

Figure 16: Colombian UHNWIs Wealth Share vs Volume Growth (%), 2010–2014

Figure 17: Colombian UHNWIs Volume by Wealth Band 2010–2019

Figure 18: Colombian UHNWI Wealth by Wealth Band (US$ Billion), 2010–2019

Figure 19: Colombian UHNWI Age Distribution (Percentage Share), 2014

Figure 20: Colombian UHNWI Distribution by Industry (%), 2014

Figure 21: Colombian Billionaires Market Overview (Volume and US$ Billion), 2010–2019

Figure 22: Colombian Centimillionaires Market Overview (Volume and US$ Million/Billion), 2010–2019

Figure 23: Colombian Affluent Millionaires Market Overview (Volume and US$ Million/Billion), 2010–2019

Figure 24: Colombian Mid-Tier Millionaires Market Overview (Volume and US$ Million/Billion), 2010–2019

Figure 25: Colombian Lower-Tier Millionaires Market Overview (Volume and US$ Million/Billion), 2010–2019

Figure 26: Colombian HNWI Asset Class Composition (%), 2010–2019

Figure 27: Colombian HNWI Trends in Alternative Assets (US$ Billion), 2010–2019

Figure 28: Colombian Trends in ‘Art, Wine and Wheels’, 2010–2014

Figure 29: Colombian HNWI Foreign Investment Allocation and Growth (%), 2014

Figure 30: Colombian HNWIs – Global Distribution of Foreign Investments (%), 2010–2019

Figure 31: Colombian HNWI Liquidity Breakdown (%), 2010–2019

Figure 32: Colombian UHNWI Asset Class Composition (%), 2010–2019

Figure 33: Colombian Exchange Rate – COP to US$, 2010–2019

Figure 34: Colombian Real GDP Growth (%), 2010–2019

Figure 35: Colombian GDP Per Capita (US$), 2010–2019

Figure 36: Colombian Domestic Market Capitalization (US$ Billion), 2010–2014

Figure 37: Colombian Commodity Indices, 2010–2019

Figure 38: Colombian Foreign Direct Investments (US$ Billion), 2010–2019

Figure 39: Colombian Inflation Rate (%), 2010–2019

Figure 40: Colombian Money Market Rate (%), 2010–2019

Figure 41: Colombian Balance of Payments (US$ Billion), 2010–2014

Figure 42: Colombian Government Debt as a Percentage of GDP (%), 2010–2019

Figure 43: Colombian Stock Market Performance (Index), 2010–2014

Figure 44: Colombian HNWI Wealth vs. GDP Ratio (%), 2010–2019

Figure 45: Colombian HNWIs – Volume by Wealth Band, 2010–2019

Figure 46: Colombian HNWIs – Wealth by Wealth Band (US$ Billion), 2010–2019

Figure 47: Colombian HNWIs – Wealth per Capita (US$ Million), 2010–2019

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