2023 has been an excellent year for CACEIS in Spain, due to strong performance of the financial markets and a host of new client business wins. In terms of assets under custody, the market reached another high-water mark at just under €3 trillion, which represents 10.2% growth compared to December of 2022. The depository market in 2023 also closed at a record high of just under €500 billion, up almost 11% on December 2022*. The positive contribution of the market in combination with our team’s strong commercial performance means that CACEIS has significantly outperformed the market. Elena Mesonero, Head of Regional Coverage Spain and LatAm, tells us about the Group's business and ambitions in these regions.
During the last 4 years since Santander Securities Services (S3)’s merger with the CACEIS Group, we have developed a much broader client base and captured market share from our competitors. We have expanded the range of services we offer, including ESG reporting, Forex forwards, Execution-to-Custody, depobank & fund accounting for Private Equity. We handle and respond to requests from new and existing clients such as connectivity through APIs, digitisation of the onboarding process, ad-hoc investment reports, and data management. Our coverage team is fully coordinated with operational and technology teams. Together they attend meetings with clients and ensure we offer best-in-class solutions. Our goal is to become the sole service provider for strategic clients, anticipating regulatory developments and changes in the market, while offering our full asset servicing range from all our locations.
In terms of key projects, we are currently working on the Spanish market reform that will come into force in March 2025, where the Spanish settlement system will be aligned with the European markets on T2S, and on the implementation of the Digital Operational Resilience Act (DORA) which will enter into force in January 2025. We are also analysing how the group’s Execution-to-Custody service can benefit mid-sized clients as US markets move to a T+1 settlement system. On the digitisation side, following on from CACEIS Bank in France, we are finalising a project to register CACEIS Bank Spain as a Virtual Asset Service Provider (VASP) with Bank of Spain. In short, we believe that a key differentiator of our company is being a pro-active partner offering local operational support teams that have a clear understanding of clients’ business activities and commercial goals.
As for our own strategy, we remain fully committed to being a leading player in the depository market and increasing our market share among insurance companies by offering our specialist services to pension funds and other collective employee funds. We aim to capture greater market share in the Private Equity community by leveraging the expertise of the groups’ experienced Private Equity and Real Estate Solutions team. Finally, we aim to broaden our custody business with international banking clients, a sector that is particularly relevant for CACEIS in Spain and the LATAM region.
Shifting the spotlight to Latin America, the region remains an attractive prospect for investors due to high real yields, especially in the lower volatility markets that benefit from political, economic, and regulatory stability. The stronger performing markets such as Mexico, Brazil, and Colombia have well-established institutions and strong supervisory and oversight processes. In these countries, S3 CACEIS (joint venture owned by CACEIS and Santander) has full local legal structures and local teams, both in areas of control (risks, compliance and legal), as well as operational, IT and commercial areas. This has allowed us to gain significant market share from long-time incumbent providers, offering securities services to both local and international clients. We have excellent teams in all three countries.
The team in Brazil is finalising the complete overhaul of the IT platforms, a major step towards a true differentiating service offering, while onboarding new clients. In Mexico, HSBC’s decision to withdraw from the Mexican securities services market was seized as an opportunity to onboard a number of prime clients. Our Mexican business is currently performing a major transformation project to expand further our offering in custody, fund administration and offshore distribution services to fund managers. Finally, in Colombia, in only a few years, we succeeded in building a solid and respected franchise, with clients from all segments of the market. These successful migrations not only demonstrate the trust these clients show in our business but also the experience of the business transition teams. We are now analysing a service offer for clients to other markets in the region.
I personally believe that the footprint we have in LatAm is unique, allowing us to offer regional services to global custodians or international banks, who are looking for a regional provider directly connected to local CSDs. Our strategy in the three markets is to grow both in terms of local clients (asset managers and asset owners) and international banks, with which we will achieve key mutually-beneficial partnerships.
It is therefore essential to keep our momentum high, adapt to regulatory changes, to the digital environment, and to our clients’ demands by offering solutions that go beyond core custody and depobank services.
* Source Inverco - Asociación de Instituciones de Inversión Colectiva y Fondos de Pensiones
