< The 2015 Latin America Research Team
Total appearances: 14
Team debut: 1993Marcelo Telles, 39, and his Credit Suisse colleagues hold on to second place. The three-strong group “was among the first to come with a more conservative, if not directly negative, view on financials,” reports one fund manager. “That made a lot of sense in light of both the worsening macro [environment] and relatively rich valuations.” In particular, another admirer adds, the analysts “became more cautious on the large Brazilian private banks earlier this year, which has been the right call. They were also quite skeptical of Mexican bank [Grupo Financiero] Banorte last year, which proved to be correct.” Indeed, this team is not enthralled with its sector, which as of mid-July lagged the regional market by 3.5 percentage points for the year to date, declining by 1.2 percent. “If you do not really have a need to be invested in Latin American banks, don’t be,” advises Telles, who is relocating from São Paulo to New York this month. “We do no not see much value in the region. Risk-reward is still not compelling enough, especially considering currency risk for investors seeking dollar returns. There are more attractive opportunities still in some developed markets and other emerging markets, especially Asia.” However, for those clients that find themselves allocating to Latin America by necessity, he counsels that “Mexican, Peruvian and Chilean banks are the most attractive within the region.” On the other hand, “Brazilian banks offer the worst risk-reward, despite high-quality management teams, followed by Colombian banks,” Telles says. His squad’s “periodic updates about banks in Brazil and Peru [allow] us to monitor the evolution in the financial system for [investment-grade] banks,” applauds a third supporter.