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Day One: Wednesday May 13, 1998

8:30 Registration & Continental Breakfast

9:00 Chairman’s Opening Remarks:

9:15    PRIVATE PENSION FUNDS: AN INCREASINGLY CRITICAL COMPONENT TO CAPITAL MARKETS IN LATIN AMERICA

Julio Bustamante, Superintendent, Administradora de Fondos de Jubiliaciones y Pensiones (AFJP)

• Understand the pension fund transition from public to private, and its impact on the local stock and bond markets
• Learn about the regulatory and commercial environment facing domestic and foreign fund managers
• Identify the differences between the structure of the portfolios and the performance of domestic and foreign fund managers
• Capitalize on the fact that private pension funds must compete for contributors’ money, and therefore have a strong incentive to perform well
• Recognize the infinite investment opportunities which abound as the pension funds, recently are now liberated from government control, have a new sense of stability and independence
• Achieve greater efficiency in terms of the transformation of savings into investment, as the best infrastructure projects bid for the available capital in the marketplace

10:05    LEARN HOW A GLOBAL FINANCIAL INSTITUTION BUILDS A LOCAL NETWORK TO ENTER THE LATIN AMERICAN PENSION FUND MARKET: THE CITIBANK CASE STUDY

Ricardo Zabala, Citicorp, Inc. (Chile)

• Measure the returns on current local investment, and make financial projections based upon regional equity trends
• Examine the volatility issues and the threat of interest rate hikes, and their impact on Latin American companies struggling to reaccess the pension funds following the region’s 1995 financial crisis
• Explore the increasing number of investment opportunities available to foreign fund managers to manage pension assets
• Build a broad geographical base, and create a legacy for establishing new businesses in developing markets
• Learn successful survival techniques: how Citibank outlasted the scores of lenders that flocked to the region in the 1970s only to flee during the 1994 peso crisis
• Establish wholly separate organizations to prevent cross-selling and to maintain the integrity of the assets
• Appeal to the affluent client sectors to accrue greater profits
• Prevent the frequent turn-over of clients, as most Latin American citizens exercise their right to change funds

12:30 Luncheon

1:30   THE TECHNICAL AND ECONOMIC DESIGN OF SOCIAL POLICY FORMULATION: REGULATORY CONTROLS IN PLACE TO PROTECT THE PEOPLES’ INTEREST

Gloria Grandolini, Senior Financial Economist, Finance, Private Sector and Infrastructure Department, Latin America & The Caribbean, The World Bank

P.S. Srinivas, Financial Economist, Finance Private Sector and Infrastructure Department, Latin America & The Caribbean, The World Bank

• Examine the relationship between economic and social policies, the design of the political systems and the characteristics and processes of social policies and structures
• Explore the reform of strategies and social programs to effectively gear benefits to target populations effectively
• Identify the political players: corporate organizations that include beneficiaries of the services which respond to networks of interests and influences established in the sphere of public bureaucracies
• Evaluate the institutional political situation and the degree of heterogeneity of the social groups affected
• Maintain a diversified, low-risk portfolio and prevent theft, fraud, or mismanagement
• Design a system for maintaining records and providing statements to contributors revealing employer’s contributions, the fund’s performance, and the accumulated balance and return on individual accounts
• Meet minimum requirements for stocks relating to frequency of trading and capitalization

2:20    THE PREVENTIR AFPJ CASE STUDY: A PENSION FUND POWERHOUSE DESCRIBES ITS ADMINISTRATIVE AND INVESTMENT CRITERIA FOR EXTERNAL FUND MANAGEMENT

Lilliana Ferriero, Gte de Finanzas, Previnter AFPJ (Argentina)

• Identify and learn from the following successes:
• Develop a successful track record in the management of international portfolios, ideally in long-term, more conservative investments
• Build a defined financial control structure which are compatible with the system in place
• Gain an in-depth insight into investment options available at the national level
• Build a stable and reciprocal relationship with the local banking sector and the national insurance organizations throughout Latin America

3:10 Networking Break

3:40   STRATEGIES TO MINIMIZE TRANSITION COSTS TO LOCAL PENSION FUND ADMINISTRATORS WHO OUTSOURCE MANAGERIAL FUNCTIONS

William Shipman, Principal, State Street Global Advisors (U.S.)

• Consider the option of investing in local banks; forming multiple bank relationships (providing commercial banking, brokerage, and investment services) to facilitate entry into local securities markets
• Become a minority partner through a joint venture with a local brokerage company as a means of entering the local pension fund market
• Establish a home office to gain knowledge about a country, its customs and regulations, as well as distribution arrangements and industry practices
• Identify the political actors: corporate organizations that include beneficiaries of the services which respond to networks of interests and influences established in the sphere of public bureaucracies
• Establish an equilibrium between healthy competition and excessive churning to maximize your Latin American pension investments

4:30   A REVIEW OF SUCCESSFUL INTEGRATION TECHNIQUES FOREIGN INSURANCE COMPANIES HAVE USED TO GAIN ENTRANCE INTO THE LATIN AMERICAN PENSION FUND MARKET

Roberto Hidalgo, Country Manager, CIGNA International, Latin American Region (Mexico)

• Understand the significance of the life insurance and pension products, and how they lead to the development of longer term investments for asset-liability matching
• Benefit form the relaxation of regulations on the primary and reinsurance markets, and its impact on the development of competition and foreign investment
• Exercise your experience in markets of greater complexity, and offer a more extensive range of choices to clients
• Design your entry strategy based upon the local regulatory and/or market conditions
• Determine the level of capital you are willing to invest and degree of risk your home office is able to manage
• Examine the potential of a joint venture as a vehicle of entry into a country, and utilize the advantages of having a partner with local market knowledge, contacts, distribution networks
• Benefit from the low set-up costs resulting from shared expenses or the partner’s pre-existing presence in the market
• Avoid the pitfalls of joint marketing campaigns including potentially incompatible corporate cultures or strategies and restrictions on foreign ownership and control
• Analyze the pros and cons of acquiring an established operation, providing that local regulations do not permit 100% ownership
• Evaluate the critical and often complex financial and administrative regulations and controls unique to each Latin American country
• Recognize foreign insurance contributions to the new markets: technical knowledge, investment management, and information management

5:30 Day One Concludes