Opportunities in South America have been largely untapped and unnoticed. Oscar Decotelli, CEO of DXA Invest, shares with us about the wealth management landscape in South Africa and how DXA is enabling its customers through technology.
Oscar describes South America as living a couple decades behind the rest of the world. While many places have embraced digital transformation, the wealth management industry in South America is still very much offline. As the region is beginning to transition to digital platforms, there is a ton of opportunity for other firms to provide digital expertise to accelerate adoption of digital technology. Furthermore, digital transformation is being driven by structural changes. Interest rates are falling in South America and people are looking for an alternative method of investment. DXA is one of the companies that is helping meet this demand by enabling people to invest. Oscar notes that typically, it is the super rich that have access to private equity investments. However, he believes that with digital technology, everyone can invest in these funds and have better financial health.
From a business perspective, Oscar acknowledges that South America is a very challenging place. Due to complexities including tax structure, it is crucial to have a local assist you in business operations. When it comes to doing investments, it is important to have a professional local manager on hand. However, when we examine what businesses are doing, the trends are similar to all over the globe. Similar to how businesses in Singapore or the US are more concerned with the environment or providing healthy food alternatives, South American businesses are doing the same. This creates a basis for comparison between companies in different geographic locations. Due to the reputation that South American has, companies here are valued less even though they provide the same services as those in Europe or US. This difference in valuation is a great incentive for people to begin investing in South American companies. With technology being an enabler, any investor globally will have access to the unique opportunities that South America as a region have to offer.
Finally, Oscar shares how DXA fits into this puzzle. Traditionally, when people invest into a private company, there is a lack of information. Only those who are exceedingly affluent have the capacity to absorb this risk and invest. However, by adopting digital platforms, DXA is able to offer investors with limited capital an opportunity to do private equity investment. Beyond access to investment opportunities, DXA provides information and updates on the companies that clients invest in. With DXA, clients are able to get a closer look at the company they are investing in and stay up to date with any activities.