Morgan Stanley is strengthening its investments in Latin America, recognizing the region’s growing economic importance amid escalating geopolitical conflicts. With wars in Europe and the Middle East and rising tensions in Asia, Latin America is becoming crucial for restructuring supply chains and access to critical resources such as food, industrial metals, transitional fuels and pharmaceutical ingredients.
To capitalize on these opportunities, Morgan Stanley has steadily increased its investments in Brazil, Mexico and other Latin American countries. This expansion has also included increasing staff and capital, as the firm sees significant opportunities in mergers and acquisitions advisory, capital markets underwriting, sales and trading and private credit. The firm currently has approximately 400 employees dedicated to serving Latin American clients.
The asset management unit, which is one of the top five wealth managers in Latin America, grew assets by about 6% last year to about $120 billion. Despite the region’s economic potential, it faces macroeconomic challenges and political upheaval, among other instability. For example, Mexico’s new president, Claudia Sheinbaum, has created uncertainty for investors over possible constitutional changes, which has impacted the peso, which has fallen nearly 8% against the dollar this year.
Morgan Stanley sees big investment opportunities in Mexico, fueled by foreign direct investment and remittances. The bank recently underwrote the $677.4 million IPO of Mexican discount retailer BBB Foods Inc. and participated in a deal involving Peruvian health care company Auna SA. It is also one of the banks announced as underwriters for Grupo Aeromexico SAB’s planned IPO.
Foreign interest in Brazil remains strong despite fiscal concerns and the real’s 10% fall this year. The country offers big opportunities in technology-enabled fintech, e-commerce and renewable energy, including second-generation ethanol for aviation. The war in Ukraine has further highlighted Brazil’s potential as a major supplier of energy and food exports to Europe.
In Argentina, Morgan Stanley’s investment activity will depend on the government’s implementation of fiscal and tax reforms. Positive measures such as inflation control, tax cuts and privatization plans could encourage further investment. The firm also aims to continue serving its institutional and asset management clients in Peru, Colombia and Chile.
