Latin America Equity

Dispelling the Myths of the Andean Pumas

STACY STEIMEL
Head of Latin American Equity PineBridge Investments Santiago, Chile

Until recently, investors seeking to tap into Latin Americas remarkable economic success story were limited in choice to the relatively liquid, highvolume markets of Brazil and Mexico. This status quo is now being challenged by a powerful new Latin American capital market a regional group of Andean nations consisting of Colombia, Peru and Chile, dubbed the Pumas vying for center stage on the Latin American investment scene as a uniquely viable investment alternative.

RAFAEL H. MENDOZA
Portfolio Manager, Latin American Equity PineBridge Investments Santiago, Chile

SANTIAGO ARIAS
Senior Analyst, Latin American Equity PineBridge Investments Santiago, Chile

Andean Pumas Showing Their Teeth

Together, these three nations have managed to grow their economies by an impressive 5% CAGR, on average since 2002, and the International Monetary Fund (IMF) expects this trend to continue through 2017.1 In addition, Andean capital markets have been among the strongest performing globally, reaching an average return of 28.1% per year since 2006, as shown in Figure 1.2 This capital market performance has been supported by compulsory private pension fund systems, providing a growing and captive local investor base in each of the Andean countries.

KATHLEEN MONTICELLO
Analyst, Latin American Equity PineBridge Investments Santiago, Chile

Investment (in Brazil) has fallen in each of the past five quarters. It now amounts to just 18.7% of GDP, against 30% in Peru in 2011 and 27% in Chile and ColombiaLatin Americas new high-growth economies.
The Economist, 8 December 2012.

FIGURE 1
Index Returns (% in USD) IPSA Index (Chile) IGBC Index (Colombia) IGBVL Index (Peru)

Andean Capital Market Returns

2006 34.1 25.5 187.1 2007 22.3 9.6 44.3 2008 -39.6 -34.7 -61.8 2009 83.7 73.0 107.7 2010 47.1 43.0 63.7 2011 -24.8 -17.8 -14.7 2012 11.9 29.6 5.0 Average Return 19.2 18.3 47.3 28.3

Overall Average Source: Bloomberg, 17 December 2012.

Open For Business: A Macroeconomic Success Story

For the past two decades, Chile, Colombia and Peru have simply been following the rules, with balanced fiscal and countercyclical savings policies; relatively low external debt; floating exchange rates and independent central banks all contributing to the singular goal of managing inflation. As a macroeconomic success story, it is the IMFs leading light. What these countries did really well was save during the last commodity cycle when their terms of trade were at a superior level, allowing them to spend away countercyclically during weaker years. Much of this spending was directed, very wisely, toward infrastructure and other capital expenditure, such that investment

This material must be read in conjunction with the disclosure statement.

1. IMF World Economic Outlook, October 2012. 2. Bloomberg, 17 December, 2012. For the main country indexes IGBVL, IGBC and IPSA in USD.

to GDP ratios actually increased in all three countries following the 2008 financial crisis. The Andean macroeconomic model also extends to several other policy measures that have allowed these countries to punch well above their weight internationally. Key among these was the early adoption of several bilateral and regional Free Trade Agreements (FTAs) and other pro-business policies. Chile leads the way, having signed treaties with all major trading blocs in the world, including the European Union, the United States, China and all Asia-Pacific Economic Cooperation (APEC) nations. In fact, Chile ranks 33rd in the world in terms of trade openness, above Brazil, India and Russia, according to the World Economic Forum. Additionally, the recently created Pacific Alliance trade bloc of Mexico, Colombia, Chile and Peru will have 90% of goods trading duty-free by the end of March 2013, according to Chilean President Sebastin Piera. Peru and Colombia have also been busy negotiating their own trade agreements in recent years: A long-awaited FTA between the United States and Colombia went into effect in May 2012, and the ink has only just dried on the trade agreement between Peru and the EU, so many of the expected incremental gains that these agreements generate among these Andean Pumas are yet to be realized. FIGURE 2 Business-Friendly Pumas

Ease of Doing Business Rank (2013) 1 2 3 4 37 40 43 44 45 47 48 55 61 130 180

Economy Singapore Hong Kong SAR, China New Zealand United States Chile Cyprus Peru Spain Colombia Oman Mexico Poland Panama Brazil Venezuela, RB

Source: World Bank / IFC Doing Business Report, December 2012.

sharp growth experienced by the Asian Tigers and the systemic financial crisis that followed in 1998.

Theres a lot of attention on Latin America, and the message we want to send is that there are alternatives to Brazil. Juan Pablo Cordoba,
Head of Colombias stock exchange (BVC)
The knock-on effect of these FTAs is that the Andean countries are making incredible progress toward enacting business-friendly policies to grease the wheels of international trade. In the World Bank/ IFCs 2013 Doing Business Report, the most dramatic improvements were achieved in the Protecting Investors category, in which Colombia is ranked sixth in the world, Peru 13th and Chile 32nd. Similar improvements were made in the Getting Credit, Paying Taxes and Trading Across Borders categories. Figure 2 shows where Chile, Peru and Colombia sit in the overall Ease of Doing Business rankings. In terms of Andean GDP drivers, despite the continued importance of natural resource extraction, it is gross fixed investments, followed by consumption, that are emerging as the core drivers of these economies. This pattern is similar to that experienced by the Asian Tigers in the 1990s, with one important difference: The Andean economies are much less leveraged. In fact, Chile is a net creditor (the first in any of the multilateral organizations throughout Latin America), with a net debt to GDP ratio of -6.9%. This is all the more relevant when we recall the

So Why Arent Investors Clamoring For Puma Stocks?

Many of the perceived drawbacks of investing in the Andean markets are now outdated myths. Although the political turmoil that characterized the 1980s and 1990s remains fresh in the minds of many investors, the Andean economies have since made great strides toward democratization. Additionally, Andean consumers are experiencing an incipient consumer boom, fueled by a virtuous cycle of investment in infrastructure and social welfare. Market liquidity and diversification are also seeing vast improvements, thanks to a strengthening of the internal drivers of these economies.

Myth 1: Andean Countries Are Politically Unstable

Reality: The image of Latin America portrayed by the mass media is one of frequent coups, perpetual military dictatorships, recurrent street protests and alternating boom and bust economies. In recent times, however, these images have become ideological dogmas and no longer correspond to reality. This is partly thanks to an ongoing process of democratization, which appears to be wholeheartedly backed by the popular majority. A recent Latinobarmetro poll published exclusively by The Economist discovered that, in Peru, support for democracy has risen from a low

of 40% in 2005 to 61% in 2012, and support appears to be growing throughout the Andean region. Not that these countries paths to democracy have been without their challenges. Chiles own democratization process began in the early 1980s when a constitution establishing a democratic transition itinerary was approved in a referendum, but it was not until the ousting of President Pinochet in 1990 that democratic reforms really took hold. Perus return to democracy following the authoritarian and corrupt Fujimori and Garcia governments was gradually restored by the Toledo administration at the turn of the millennium. Colombias stability over the past decade under the successive leaderships of President Uribe and Santos has been marred for years by guerrillas, paramilitaries and narcotics traffickers. However, the country appears to have managed to stage a Colombian comeback recently, and negotiations between the government and the Revolutionary Armed Forces of Colombia (FARC) are underway in earnest.

IPOs and increasing value of the constituent companies during the period.5 Apart from increased trading activity, there has been a dramatic increase in mergers and acquisitions (M&A) between the three countries, specifically targeted at best accessing the MILA investor. Over US $7 billion (disclosed) in M&A activity has been invested between 2010 and 2012 in everything from fast food to finance, specifically to gain access to these markets.6

Myth 3: Andean Markets Are Not Sufficiently Diversified

Reality: The Andean markets taken together are welldiversified across sectors, with minimal sector overlap. In fact, unlike Mexico, the combined market contains utilities and oil sectors, as shown in Figure 3. The Andean markets also appear to show relatively low levels of correlation between countries, as shown in Figure 4.

Myth 2: Attractive Markets, But Low Liquidity

Reality: The stock markets of Chile, Colombia and Peru have more than 600 listed stocks, and 30 of the 40 companies in the S&P MILA 40 index created in August 2011 now trade more than US $1 million per day.3 Institutional investors are responsible for much of the activity in local markets. Total pension assets in the three markets together represented US $276 billion as of December 2012, amounting to 33.1% of the aggregate GDP of the three countries combined. This amount grew by US $50.2 billion (or 22.3%) during 2012, as Colombian pensions increased by 28.1%, Peruvian pensions 24.6% and Chilean pensions by 19.1%.4 These captive savings, particularly when augmented by additional savings in mutual funds, are an important source of funds for the capital markets. Still relatively misunderstood and underestimated is the combined MILA exchange that launched in May 2011. From January to October 2012, the three exchanges that comprise MILA traded an average of US $7 billion per month, but only US $36.2 million in MILA transactions, per se, as they were predominantly retail transactions and frustrated by a web of foreign exchange and tax differences between the three markets. However, the subdued activity on MILA should not be confused with limited activity in the three markets. According to the World Federation of Exchanges, the Lima Stock Exchange experienced the 11th largest variation in domestic market capitalization among all global stock market variation over the same period of +5.3%. This outperformance not only reflects the Lima Stock Exchanges relatively small starting base, but is also an indication of the volume of

FIGURE 3
Sector Utilities

Andean Markets Well-Diversified Across Sectors

Brazil 4.3 12.1 8.3 17.4 19.2 4.4 25.3 3.3 0.6 2.6 Mexico 0.0 10.4 28.7 0.0 9.6 5.6 17.5 23.9 0.8 0.0 Chile 21.4 5.9 11.3 0.0 16.3 21.3 17.8 2.7 0.6 1.3 Peru 2.9 0.0 5.1 8.8 12.3 5.7 64.1 0.6 0.0 0.0 Colombia 3.2 0.0 11.5 52.4 24.9 3.0 4.0 0.4 0.0 0.0

Consumer Discretionary Consumer Staples Energy Financials Industrials Materials Telecom Svcs Health Care Information Technology

Source: IPSA, IGBVL, Bovespa, Mexbol, IGBC. Sector breakdowns as of 25 September 2012 and are subject to change.

FIGURE 4
Security Chile Peru Colombia Brazil Gold Oil China

Low Levels Of Correlation Across Markets

Chile 1 0.525 0.339 0.443 0.159 0.354 0.205 Peru 0.525 1 0.39 0.545 0.385 0.435 0.215 Colombia 0.339 0.39 1 0.479 0.165 0.421 0.143 Brazil 0.443 0.545 0.479 1 0.294 0.468 0.174 Gold 0.159 0.385 0.165 0.294 1 0.352 0.166 Oil 0.354 0.435 0.421 0.468 0.352 1 0.204 China 0.205 0.215 0.143 0.174 0.166 0.204 1

Source: Bloomberg, 1 year correlations, daily basis, for the period 1 Jan 2012 to 21 Dec 2012 (Chile = IPSA; PERU = IGBVL; Colombia = IGBC; Brazil = IBOV; Mexico = MEXBOL; Gold = Gold Commodity; Oil = CL1 Commodity; China = SHCOMP). 3. IMF, World Economic Outlook, Oct 2012. 4. Bloomberg.com, May 2011. 5. World Federation of Exchanges, December 2012. 6. Morgan Stanley Research, December 2012.

In the commodities sectors, for example, each Andean country has its own specialization: Chile may be best known for its copper resources, but it is paper and pulp that dominates Chilean capital markets. Peru specializes in silver, gold and zinc, and Colombia in oil and gas. Where there is under-representation in one market (in the consumer-related sectors in Peru, for example,) there tends to be over representation in another. The consumer sectors are well-represented in Chile and invest heavily in Peru; in fact, Chilean consumer companies Cencosud, Falabella, Forus, Parque Arauco and Ripley derive, on average, 17.2% of their top-line revenues from that country.7 This leads to idiosyncratic opportunities across sectors.

FIGURE 5
Gini Coefficient Annual % Change 2000-2010

Lower Levels Of Inequality In Andean Region

Chile Peru Colombia China India OECD 30 +0.25

-0.66

-1.22

-0.16

+2.02

+1.43

Source: Lustig et al, 2012. A negative change in the Gini coefficient over time expresses lower income inequality over time and vice versa.

Morgan Stanley Research, real wages expanded at a CAGR of 6.1% between 2003 and 2011 in both Peru and Colombia versus 4.4% in Brazil and 2.4% in Mexico. This strong wage growth is expected to continue on the back of robust GDP growth rates. Furthermore, industry data suggests that the level of penetration of the formal retail sector in the Andean region is relatively low, which creates another pillar for industry long-term growth.

Myth 4: The Andean Consumer Sectors Are So Attractive, But There Arent Enough Listed Stocks
Reality: Although the Andean consumer markets are among the smallest in Latin America and consumers currently have the lowest income per capita, Andean growth rates over the past decade have been the most impressive in the whole of Latin America. For example, real retail sales grew at a CAGR of 6.5% in Colombia, 7.4% in Peru and 4.9% in Chile between 2002 and 2011. In addition, the average consumer in Colombia and Peru has just crossed a critical threshold of US $10,000 purchasing power parity per capita, which means that both countries should start to see increased demand for discretionary items, such as mobile phones, TVs and household furnishings. Chile passed this US $10,000 mark over a decade ago and is expected to reach US $22,000 by 2017.8 This increased spending power by Andean consumers is partly thanks to the unorthodox countercyclical social policy frameworks put in place by the respective Andean governments to reduce poverty, unemployment and inequality. For example, conditional cash transfer (CCT) programs (known as Solidario in Chile, Familias en Accin in Colombia and Juntos in Peru) are highly successful poverty reduction tools in the region. After rising in the 1990s, inequality in the Andean countries has unambiguously declined over the past decade, while it has been on the rise elsewhere in both the developing and developed worlds, as shown in Figure 5. Other positive developments include the fastest real wage growth rate in Latin America since 2003. According to

Myth 5: Andean Markets Are Heavily Reliant On China

Reality: Some commentators suggest that the Andeans, in general, and Chile, in particular, are vulnerable to downswings in the Chinese economy, given that they are key exporters of commodities to that country. While China has indeed been a significant source of income for Chile over the past decade, the reality is that Latin American corporates derive 65% of their income from trade within their own region, not with the rest of the world.9 That has the effect of helping to insulate the companies in these markets from global instability. The same could be said of basic commodities in Peru, but a closer inspection of the listed companies underscores the importance of gold in Peru, which behaves very well in risk-off or inflationary environments. In addition to the direct corporate revenues generated from direct sales to China, we looked at foreign direct investment from China into these countries another way of ensuring access to basic resources and found it is relatively insignificant, in spite of all the headlines it generates.

Wow! These Pumas Are In Great Shape, But What Are The Risks?
The Andean Pumas are on high growth trajectories so, naturally, we need to be mindful of the inherent risks in investing at this stage of development. Social conflicts relating to income inequality, education and health care reform, in addition to resource management, are key issues that Andean policymakers must address in coming years. In Chile, popular demands

7. 2011 Annual Reports, December 2012. 8. Statement from Chiles Finance Minister Felipe Larrain, November 2012. 9. Morgan Stanley, August 2012.

for public sector reform and higher spending on health and education have led to heightened strike activity and required the attention of the government. In Peru, although President Humala has made expanding social inclusion to all citizens a top priority, the local population in some parts of the country, such as in the northern Cajamarca region, has been opposed to foreignowned mining projects. In Colombia, the FARC stepped up its attacks on Colombias economic infrastructure in the first half of 2012, striking oil pipelines 67 times, more than triple the level during the same period in 2011. Positively, the FARC, who seek land reform and political inclusion, are currently engaged in peace talks with the government. Energy and water management are crucial for the Andean countries to maintain their high growth levels, particularly for Chile. With current demand growth projections, Chiles electricity generation and transmission infrastructure will be insufficient from 2016 onward.10 The Chilean government intends to double the size of the countrys renewable energy sector, but has faced tough opposition to proposals to build hydroelectric power plants to meet future demand. While these are significant challenges, the resolution of these issues could solve deep structural issues in these economies and make this region even more attractive for future growth and investment. There is also a risk in the Andean region that economic exuberance could become too strong. In such a scenario, excessive bank lending could lead to a credit bubble or an oversupply of housing could cause a housing bubble. Currently, there is still significant room for credit growth in all three Pumas, and only recently has the possibility of a housing crash spread in Chile. The Chilean government, however, quickly formed a committee in late 2012 and declared that the recent housing price appreciation was not in a bubble. Finally, there is a risk that the Andean countries will suffer from the Dutch disease, which occurs when revenues from natural resources (natural resource price appreciation) make a countrys currency stronger, making the manufacturing sector less competitive. Chiles and Perus currencies have had among the strongest in appreciation in recent years among emerging markets currencies, and still manage to maintain decent manufacturing sectors. Even so, monetary authorities have the tools to occasionally engage in dollar purchases to weaken their currencies.

However, on the question of whether the Andean markets are better accessed through ETFs or directly, we are strong believers in an actively managed strategy. The main reason is that an ETF replicates the whole economy, but in order to generate alpha, it is necessary to hone in on different stocks during different parts of the economic cycle: investing in the right part of the cycle at the right time. This cannot be achieved if you invest in ETFs. For example, by investing in the components of the index, you get a small amount of exposure to copper, but not nearly enough. In addition, it is difficult to get exposure to the consumer in Peru without investing in a handful of less liquid companies, and it is hard to access Colombias big road projects without investing in some smaller companies.

Andean Pumas: Strong Growth Ahead

Years of consistently applying solid macroeconomic policies have placed the Andean Pumas on a trajectory of high, sustainable growth, and a strengthening of institutions has made these countries more stable and equal. Meanwhile, a burgeoning business environment has helped make capital markets more welcoming, while risks have subsided. The Pumas have truly begun to show their teeth. Now is the time to get a piece of the action.

Here we discuss three very interesting investment ideas in the Andean markets. By way of these case studies, we aim to provide some useful insight into our analytical approach to idea generation.

Case Study 1: Ecopetrol

If you ask most investors what integrated oil company comes to mind first, 9 out of 10 will say Petrobras. But did you know that on a valuation basis, Ecopetrol trades at multiples above Petrobras and that Ecopetrol was the largest IPO in 2007? Colombia selected a highly original method to issue shares for the company: Following in the footsteps of Margaret Thatcher when she promoted wider share ownership in the UK, President Uribe limited the first issue to Colombians only. The original issue was oversubscribed fourfold and sold to over 400,000 Colombians. Shares were made available widely, even in grocery stores, so that they would be accessible to all Colombians. This approach to participation in the capital markets has helped to develop a very active retail market for local share issues. It has also helped to debunk the myth that it

So Why Not Just Gain Exposure To These Markets Via Exchange Traded Funds (ETFs)?
Following the MILA integration in 2011, ETFs have done the markets a great favor by creating further liquidity.

10. Chilean Ministry of Mining, July 2012.

is difficult to issue shares in Colombia. In fact, many other IPOs have followed in the same footsteps as Ecopetrol. International share listings did not follow for Ecopetrol until 2008 when the company listed shares both in the US and in Germany, diversifying its investor base. When initially listed in 2007, the market cap of Ecopetrol was just US $40 billion. Today, it is US $121 billion. That is very impressive. Ecopetrol is very similar in size to Petrobras today, as measured on market cap and 2P reserves (proven and probable reserves). Its production profile, however, is very different as it produced 724,000 barrels per day in 2011 (4x more than at its IPO in 2007), compared to Petrobras production of 2.3 million bpd. Proven reserves were just 1.8 million at Ecopetrol versus 12.8 million bpd for Petrobras, which illustrates that the issue was handled so incredibly well that it is truly amazing that Ecopetrol has achieved this stock valuation compared to Petrobras size. The point is that you do not need to invest in Brazil to get exposure to oil production in Latin America.

Case Study 3: Graa y Montero

Peru has a significant infrastructure deficit of US $70 billion. The World Economic Forums (WEF) 2011/12 Global Competitiveness Index (GCI) ranks Peru 89th out of 144 countries in terms of its infrastructure. Only Colombia has a lower rank in Latin America. Although, it used to be worse (Perus ranking has improved from 110th in 2008/9), poor infrastructure poses a bottleneck to growth. For instance, road density in Peru is only 10 kilometers per 100 square kilometers versus 160 kilometers on average globally, according to the World Bank. Poor government execution exacerbates the problem: public infrastructure spending grew 22% year-onyear to September 2012. This is significantly below the governments budget of 40% growth. Explanations behind the execution difficulties include the challenges of managing a bigger budget and the increasing scale and complexity of the projects, as well as a lack of qualified specialists in the public sector. Therefore, the role of private investment is becoming a key factor. The government has recently announced a plan for US $10 billion in infrastructure projects under a concession scheme, which basically allowed to Chilean neighbors to reach infrastructure levels similar to those of developed countries. The focus will be on roads, airports and natural gas pipelines, and is supported by tax incentives to encourage participation of private players. The only company listed in the sector, Graa y Montero, is also a best in class. The companys track record as a highly efficient infrastructure player makes it the partner of choice for local and international companies in a fiercely competitive market where every major international company is a player. As of June 2012, the companys backlog hit a record high of US $3.3 billion (including both public and private projects), becoming the leading Engineering and Construction company in the sector (doubling its closest competitor, Odebrecht, in terms of market share). Despite the heavy construction businesss inherent unpredictability, Graa y Monteros backlog is 100% signed contracts. In fact, only one contract has been canceled (Cerro Verde/Freeport in 2009). Graa y Montero operates via four divisions: civil construction, urban construction, mining services and electromechanical operations. Graa y Monteros strategy is to pursue concessions with the potential to generate a trickle down effect across the organization, resulting in higher across the board revenues.

Case Study 2: Forus

Income growth and job creation in the Andean countries have led to rapid upward social mobility and increasing internal consumption. As incomes rise, footwear and apparel consumption grow faster than the consumption of other goods. As a result, Andean footwear and apparel retailer Forus is an attractive vehicle to ride the rising tide. Forus is a Chilean retailer that also has a presence in Colombia, Peru and Uruguay. It operates international licenses of Wolverine Worldwides shoes and outdoor clothing brands and has also developed its own brands. It now operates 23 brands and 20 different retail store concepts in LatAm, selling shoes, apparel and accessories in a total of 316 stores. In addition, Forus distributes its products wholesale to department store operators (Falabella, Ripley, Paris and La Polar), widening its access to clients through their expansion plans and benefiting from department store consumer credit systems. Between 2005 and 2011, revenues grew at a CAGR of 16.6% while EBITDA grew at a CAGR of 28.7%. Forus should sustain strong top-line growth and high profitability due to its exposure to growing economies with low retail penetration (Peru and Colombia), regulatory changes in Chile (which should favor specialty retailers that do not rely on credit) and strong consumption across its territories. In addition, Forus highly flexible business model, built on leased stores and a part-time sales force, allows it to adapt to the economic environment.

BIOGRAPHIES
STACY STEIMEL Managing Director, Portfolio Manager, Head of Latin American Equity PineBridge Investments, Santiago Ms. Steimel joined PineBridge in 1998 and is responsible for managing the investment activities of Latin American equity portfolios. Her previous experience includes business development in a local investment bank, IM Trust, and three years as assistant to the US executive director of the Inter-American Development Bank, in addition to nine years experience in international finance for the US Treasury Department. Her postings included key positions in the Group of Seven in Washington, DC and in the Embassy in London. She also served as a legislative assistant in the US Senate and House of Representatives. Ms. Steimel received a BA from the College of William and Mary, an MA in Latin American Economics from the University of Texas at Austin and an MBA from the Catholic University of Chile.

RAFAEL H. MENDOZA GRENDI Portfolio Manager, Latin American Equity PineBridge Investments, Santiago Mr. Mendoza joined the firm in 2010 and is a portfolio manager responsible for Utilities, Mining, Health care and Transport sectors. He previously worked for six years at BICE Inversiones where he was head of equity responsible for the investment activities of 12 mutual funds and 10 analysts. His experience included business development of Latin America funds. Mr. Mendoza also held the position of director of research and portfolio manager at BICE, covering small- and large-cap stocks in Chile from 2004 to 2010. He actively managed Andean funds and a regional strategy with a passive Brazilian sleeve. Mr. Mendoza received a masters in Economics, specializing in financial economics and a degree in business engineering from the Catholic University of Chile.He currently teaches valuation analysis at both the Catholic University of Chile and the University of Los Andes.

SANTIAGO ARIAS Senior Analyst, Latin America Equity PineBridge Investments, Santiago Mr. Arias joined the firm in 2010 and is a senior analyst responsible for Financials, Homebuilders and Telecommunications sectors. Prior to joining PineBridge, he worked at a private equity firm in Washington, DC and managed a portfolio of global microfinance companies. Formerly, he was employed in a commercial bank in Spain, where he structured and commercialized sector-specific products and increased the banks coverage in Latin America, Africa and South Asia. He also worked as a strategy consultant for Fortune 500 companies. Mr. Arias interned with Pinebridge Investments in 2007. Mr. Arias holds a masters degree in International Finance and Emerging Markets from SAIS at Johns Hopkins University.

KATHLEEN MONTICELLO Analyst, Latin American Equity PineBridge Investments, Santiago Ms. Monticello joined the firm in 2011 as an analyst responsible for the consumer staples and consumer discretionary sectors. Prior to joining PineBridge, she worked as a credit risk analyst, focusing on Latin American corporates, sovereigns and hedge funds with Morgan Stanley. Ms. Monticello has also worked in the US Treasury Office of International Affairs, and interned at the US Embassy in Chile, where she enabled US investors to liaise with local Chilean frms. She has also taught business English at one of the local universities in Santiago, Chile. Ms. Monticello holds a masters degree in International Relations and International Economics from SAIS at Johns Hopkins University in Washington, DC. She also holds a bachelors degree from the University of Notre Dame in Political Science with a minor in Latin American Studies. She was also the recipient of a Fulbright Fellowship.

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