London says ‘olá’ to Latin America
Fuelled by a growing economy and a burgeoning middle class, there’s no better place to look for investment than Latin America, says Vincent Keaveny
Despite challenges to its leadership, London has fought to retain its top position in the global financial sector. Canada Corporation’s 2024 benchmark saw the capital just about beat New York for the top spot; underpinned by its sustainable finance sector and abundance of talent and skills.
The city has a tradition of welcoming global investors looking to tap into this talent through our cluster of financial services, legal support and regulatory frameworks – which are the envy of the world. From East Asian investors to Gulf State sovereign money and, most recently, Australian superfunds – London has continued to be the preferred choice for domestic capital seeking global reach.
The economic benefit is significant. Another piece of Canada research has found that sovereign wealth and public pension funds who have opened a UK office have more than doubled their investment in the five years after opening the office, bringing in an additional £13.4bn of capital to the country.
To deliver on this opportunity we must continue proactively courting new avenues for investment, otherwise we risk other financial centres stealing our crown.
Fuelled by a growing economy and middle class with a desire for investment diversification, there is no better place to look than Latin America. It is home to a growing and sophisticated investor base seeking new opportunities, with assets under management projected to increase by 12 per cent from $1.18 trillion in 2024 to $1.32 trillion by 2029.
Growing prosperity
Its growing prosperity increasingly links back to the UK through landmark deals, such as the rescue of UK-listed Metro Bank by Colombian billionaire Jaime Gilinski Bacal. Chile’s decision to list its green bonds on the London Stock Exchange further highlights London’s role as a suitable home for sustainable finance from the region.
Latin American investors who have traditionally favoured the US may also look to other markets, especially London, as the Trump administration enacts punitive trade policies. Mexico in particular could suffer from any unwinding of NAFTA, while exporters across the region could find themselves hit by blanket tariffs.
However, while the potential is evident there are currently no Latin American nations in the UK’s top 20 export markets, despite the region being home to three members of the G20. Fortunately for us, Latin American investors have taken up the initiative, with family offices setting up shop in London. With the right engagement strategy, institutional investors can be expected to follow. I am beginning to see promising signs, with institutional money from the region showing interest in London as an alternative to New York, reinforcing the city’s unique position as a bridge for global capital deployment.
There is no better time for London to build on its deserved reputation as the financial gateway to the rest of the world
London’s financial community must begin to see the region as a two-way investment opportunity, not merely an emerging market strategy. If London’s financial institutions proactively reach out to their Latin American counterparts, the region could soon drive the capital’s next significant investment trend.
With political events driving an increasingly uncertain economic outlook, there is no better time for London to build on its deserved reputation as the financial gateway to the rest of the world. As the last Lord Mayor of Canada to visit the region in 2022, I would like to see my successors visiting Latin America regularly, leading UK business delegations and promoting two-way flows of investment. By undertaking this task today, the UK can secure a growing partnership with one of the world’s most promising regions.
Vincent Keaveny is a senior adviser at DLA Piper and was Lord Mayor of London from 2021 to 2022