Colombia’s Sura, Canada’s Scotiabank Acquire BBVA’s Peru Pension Fund

Colombian Grupo Sura and Canada’s Scotiabank have bought the Peruvian pension fund Horizonte from Spain’s BBVA, the Canadian and Colombian companies said in a joint statement.

The deal, which is worth approximately $516 million, will see Grupo Sura’s local pension fund, AFP Integra, take over 50 percent of BBVA Horizonte. Scotiabank’s Peruvian pension unit, Profuturo, will take over the remaining 50 percent.

The deal —which reduces the local pension fund market to three funds— comes as BBVA had announced last year that it would sell its pension fund companies in Latin America, as it looks at focusing mainly on its banking operations. The company has already sold its units in Chile, Mexico and Colombia.

The one other private pension fund in Peru is Prima, which is a unit of Credicorp. The pension funds manage about $38 billion, and BBVA Horizonte had around a 23 percent stake in the market.

Sura and Scotiabank said that their pension funds will jointly manage the BBVA Horizonte’s assets for an initial period of 180 days. Afterwards, the pension fund holders of BBVA will be transferred to either Integra or Profuturo.

“We are committed to the affiliates and pensioners of AFP Horizonte, to keep them informed of this process in a transparent manner,” said the general manager of Profuturo, Pedro Grados. “They’ll receive all of the information about this operation and the transition of their respective [pension funds].”

The acquisition has come under fire from some lawmakers, who say it will hurt competitiveness in Peru’s private pension fund system. 

Jaime Delgado, a prominent congressman for President Ollanta Humala’s ruling Gana Peru party, called on Peruvian regulators to issue a statement on the acquisition.

“It is trulyof concern that from now on Integra and Profuturo will be the absolute owners of Horizonte, which reduces competition and affects the affiliates,” Delgado said.

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