The Latin American pension fund administrator will be acquiring Colfondos from Scotiabank and Mercantil Colpatria


Image: Colombian pension administrator Colfondos to be acquired by AFP Habitat. Photo: courtesy of rawpixel/Pixabay.

Administradora de Fondos de Pensiones Habitat (AFP Habitat) has agreed to acquire Colombian pension administrator AFP Colfondos from Scotiabank and Mercantil Colpatria in two separate transactions.

Scotiabank holds a stake of 51%, while Mercantil Colpatria owns the remaining 49% in the Colombian pension administrator.

Financial terms of the deals were not revealed. However, AFP Habitat will be acquiring the stakes from the two sellers on substantially the same terms.

Established in 1991, Colfondos offers products and services pertaining to obligatory pensions, and voluntary and compulsory layoffs. It was acquired by the Colpatria Group in 2009, and Scotiabank became a majority shareholder in the pension fund manager and about three years later.

Colfondos is claimed to be the third largest pension fund manager in Colombia, with 1,916,000 clients and 27 years’ experience.

Rationale behind AFP Habitat’s acquisition of Colfondos

Upon its acquisition, AFP Habitat expects to strengthen its footprint in Chile, Peru and Colombia, reaching a market of nearly 100 million inhabitants and more than $850bn (£705.01bn) of total GDP.

AFP Habitat is a Latin American pension fund administrator which provides pension products and services to more than three million customers in Chile and Peru. The company’s main stakeholders are Inversiones La Construccion (ILC) and Prudential Financial, which have a combined stake of 80%.

ILC CEO Pablo González said: “This transaction consolidates the corporate relationship we have with Prudential and ratifies our vision regarding the potential of the Latin American market.

“Likewise, and if authorized by Colombian regulatory authorities, AFP Habitat will take a significant step in its expansion strategy, contributing in a new country its differentiating attributes such as its track record in investment returns, professionalism and leadership in the industry.”

For Scotiabank, the sale of stake in Colfondos supports its decision to focus on its core banking operations in Colombia.

Scotiabank Colpatria president and CEO Jaime Upegui said: “Scotiabank is committed to growing and increasing our scale in Colombia as demonstrated by our recent acquisition of Citibank’s retail and commercial operations last year, increasing our wealth management and insurance offerings to our customers.

“We are committed to working closely with AFP Habitat to support a smooth transition of the business.”

The closing of the deal is subject to receipt of regulatory approvals and satisfaction of customary closing conditions.