Q: How do developments in Mexico translate into opportunities for trust and agency services providers?
BG: The developments revolve mainly around the energy reforms. You have three markets which are affected: mostly it’s about oil and gas, then power and also telecommunications as well. Clearly there will be an influx of investment into Mexico because the reforms are allowing more foreign bodies to take a more active role in the opportunity set. In the past, a number of foreign firms were active but in the context of vendor relationships where their services were in the employ of the Mexican oil and gas industry. But they can now take equity interests in initiatives and get the upside that comes with that. But the rules continue to stipulate that they cannot own the hydrocarbons; the resources themselves continue to be the property of Mexico.
With this influx of opportunity comes the need to service it. There is a great deal of focus on how investments are to be financed and this is where we can play a role. Trust and Agency Services can facilitate many types of transactions, effectively acting as an intermediary between the borrower and the lender. We can help transactions come to completion and provide the administrative services to facilitate financings but we are not just about administration. We are also about risk management, allowing the borrower and lender to come together and look after their interests.
Q: What skills and experience are especially relevant in a market like Mexico?
BG: Some of it is hard technology and some of it is soft skills. We are very fortunate that Mexico has trust laws which have a great deal of case precedents so you have confidence in enforceability. We have tremendous experience across multiple sectors. So we are strong in areas like oil and gas and power and we have been active in those areas for a long as Deutsche Bank has been present in the country.
The soft skills include an understanding of how business is done in different markets. Deutsche Bank is not viewed as a foreign bank in Mexico and it’s considered a partner rather than a vendor. As a strategic partner, we’re there to help companies to be successful with their strategic endeavours. It’s about forging very strong relationships. That’s really important because you want to do business with people that you know and trust.
Q: What are the keys to successfully building relationships and earning the trust of other players in the market?
BG: Each market is different. One overriding theme within Latin America and especially in Mexico is that the markets are quite robust and have depth and breadth but it’s a very close-knit community. Being a part of the community is a very important aspect in being successful and supporting the corporate finance market effectively in Mexico. But it goes beyond simply having relationships with many different parties. We provide a service that facilitates transactions, helping to form and execute them, and where a lot of trust is placed in the provider and we are given a lot of responsibility as part of the team.
Q: What might a typical mandate for Deutsche Bank in Mexico look like today? Is that likely to change in future?
BG: We see a great deal of transactions in the corporate finance market and also in the M&A market. The sectors we are most active in are oil and gas, renewable energy, real estate and M&A. And you don’t really have typical mandates. Conceptually, you may have similar deals but our job is to take our products and services that we have in our portfolio and employ them as a customised solution for clients’ needs. So we take our current technology and deploy it to transactions in unique ways. There are changes in the market and our products and services will meet those needs. As new financial strategies and techniques emerge, we will deploy products and services in a way that will accommodate those changes. It’s a bit like a Lego set where you have all the pieces but you have to put them together in different configurations.
Q: How much resource is Deutsche Bank putting into Mexico?
BG: We have a huge commitment to Mexico. Trust and Agency Services has grown quite a bit and the team is divided into four different departments with critical roles. But we have to keep expanding, bringing in new talent both from within the organisation and from outside.
Q: How does/will the trust and agency activity interact with other parts of the Deutsche Bank organisation?
BG: The interesting thing about the Trust and Agency Services business is that, in addition to the resources that the department has – which are considerable – the even greater resources of Deutsche Bank are behind it. So we can tap into the larger organisation for technical expertise or services. For example, we can offer cash management and foreign exchange to enhance the delivery of our service and often seek the expertise of multiple areas from across the institution in order to orchestrate customised solutions. We often see foreign exchange, trust and agency, equity and debt capital markets, corporate finance and trade and export finance all working together to provide a seamless solution.
Q: How do you go about attempting to establish a competitive edge?
BG: The philosophy of the bank is that the client comes first. We seek to act with great integrity and objectivity to deliver a whole solution. The way we look at what we’re doing is that it’s not a service, it’s about providing the client with the means to meet their strategic objectives and the role that we play is secondary to ensuring that our client’s endeavours are completed successfully. We position ourselves not as a vendor but as a strategic trusted partner which can help clients to meet their objectives.
‘ONE OF THE MOST ATTRACTIVE ECONOMIES IN THE WORLD’
Jorge Arce, Chief Country Officer, Deutsche Bank Mexico, says Mexico will grow even faster in the years ahead
Deutsche Bank has been present in Mexico for over 50 years, where it acts as a full service bank delivering solutions to clients through its global platform. Serving as a universal bank in Mexico, we provide a broad range of opportunities for our clients through investment banking, debt and capital markets, as well as advisory and transaction banking.
Our expertise in Mexican financial markets serves issuers including corporates, pension funds, insurance companies and mortgage providers, as well as borrowers and lenders in the project finance sector.
Our franchise continues to grow, thanks to our high quality service and commitment to our clients alongside our ability to identify risks and opportunities for bottom-line business growth.
Today, Mexico’s growth continues, and is one of the most attractive economies in the world due to its economic and trade openness as well as its overall financial strength. We anticipate that the economy will continue on this upwards trajectory and reach an even higher level of growth.
BUILDING THE RESOURCE
The Deutsche Bank Global Transaction Banking team was recently bolstered by a new appointment
Liliana Rendon comes to Deutsche Bank Global Transaction Banking with a law degree and over 10 years of corporate trust experience working at some of the premier infrastructure finance institutions in Mexico.
She works within the Trust and Agency Services business and is the resident expert and senior relationship manager for infrastructure finance in Mexico. While being an expert on all aspects of corporate trust and related financing structures, she is a specialist in infrastructure finance.
She has worked on some of the most significant infrastructure projects in Mexico, with experience in bridge, road, tunnel, shipping port and airport projects. Rendon notes that “the range of infrastructure projects has grown exponentially and keeping pace with the corporate finance strategies to support these projects is critical to a corporate trust provider in Mexico.”
She further notes that “Deutsche Bank has always been strong in supporting the energy, power and real estate markets. Our growing business supporting infrastructure projects in Mexico is an important complement to our strengths, and is personally rewarding by helping to build and renew infrastructure that is very much needed for the growth of Mexico’s economy.