Citigroup Inc. is bulking up its presence in the developing Latin American pension fund market.
This week the New York banking company - which owns 50% of Grupo Siembra, one of Argentina's largest private pension companies - said it would acquire the remaining 50% stake in the company.
The seller, Spain's Banco Bilbao Vizcaya Argentaria SA, recently entered the Argentinian pension market through a merger.
Argentaria SA had bought a 50% share in Siembra from Citicorp in 1998 for about $280 million, after Citicorp's original partner dropped out.
Argentaria was acquired this year by Banco Bilbao Vizcaya SA, which owns part of another Argentine fund manager, a spokesman for Siembra said.
Citigroup has decided not to seek a new partner, the Siembra spokesman said.
Siembra ranks among the top four pension companies in Argentina, with $3.2 billion of assets under management.
Terms of the deal, expected to close in the first quarter, were not disclosed.
However, it could be worth as much as $300 million, according to reports.
Separately, Citigroup said it more than doubled its stake in the Mexican pension fund company Afore Garante from 40%, to 91%. Garante, the fourth-largest pension company in Mexico, has $1 billion of assets under management.
Argentina and Mexico are among a growing number of Latin American nations moving to privatize their social security systems.
A 1999 study by Cerulli Associates in Boston found that 75% of workers in Argentina invested at least some assets with private pension funds.
The Latin American market has become more attractive as more pension fund managers move into other areas of asset management, such as mutual funds and private banking, said Ben Phillips, a managing director at Cerulli.
Other banking companies that have entered the Latin American pension fund business include Mellon Financial Corp. and FleetBoston Corp.
