With most Latin American central banks having tamed spiraling inflation that emerged in the wake of the pandemic, reduced domestic-fixed-income yields have inspired retail and institutional investors to search for better returns in cross-border markets in 2025, benefiting mostly active and passive UCITS providers operating in the region.

This was but one of the findings in Cerulli Associates’ latest report, Latin American Distribution Dynamics 2025: Cross-Border Asset-Gathering Strategies Amid Shifts in Retail and Institutional Demand. The report sizes the six major asset management markets of Latin America, and forecasts overall growth over five years as well as potential demand for cross-border vehicles. Qualitatively, it alerts global managers to emerging distribution and partnership opportunities in both onshore and offshore markets, from a product, tax, and regulatory perspective.

A second trend energizing the sales teams of global asset management companies has been reform of the private pension systems in Mexico and Chile, the region’s two largest. In both countries, the government has supported boosts of contributions to private pension managers as well as conversions to target-date models.

“The combined impact of the Mexican and Chilean pension reforms is faster-growing industries adopting long-term investment approaches, which is music to the ears of global asset gatherers,” said Thomas Ciampi, director of Latin Asset Management, a strategic partner of Cerulli Associates for Latin America.

By 2029, the two countries’ pension industries are expected to nearly double their allocations to cross-border vehicles, to USD $300 billion from USD $155 billion at the close of 2024. Product preferences of the pension funds are expected to grow more diverse, incorporating more alternatives vehicles in their portfolios, creating competitive pressures with traditional active fund managers.

The report also focuses on the changing retail landscape across Latin America, as niche distributors come to assume a greater slice of overall market share, to the detriment of large global broker/dealers and onshore retail banks. For some years this has been especially relevant to asset-gathering efforts in the U.S. Offshore and Latam Offshore space, where hundreds of financial advisors have fled large firms and established independent boutiques. Yet, more recently, a similar move is afoot in the onshore space as well, helped along by fintech investment, the rise of social trading platforms, and easier access to offshore products registered locally—especially exchange-traded funds (ETFs).