TOP FLIGHT CAPITAL
Isidoro Korngold and his Mexican partners are launching Alta International Bank in Texas to capture the lucrative market of Mexicans with second homes in the state.
PODER MAGAZINE
APRIL 2007
By Analisa Nazareno, San Antonio
Swirls of red-painted steel soar 65 feet into the San Antonio sky, not too far from the low-key, limestone tourist attraction known as The Alamo.
The red statue -- a gift from the Asociación de Empresarios Mexicanos en San Antonio -- stands as a gigantic monument to the transforming power of NAFTA.
A few blocks away, in the Bank of America building, Isidoro Korngold, who watched as the statue went up, has seen the many other ways that the Mexican elite have changed the landscape of this city.
Because of NAFTA, the region encompassing the northern states of Mexico and the Texas border, Korngold says, is "a machine for growth" with Mexicans setting up second homes and businesses in Texas and creating wealth in the
United States.
As a portfolio manager and as a banker, he says: "We want to capture that."
Peruvian native and a Wharton School of the University of Pennsylvania graduate-is co-founder of San Antonio-based Intercontinental Asset Management Co., an independent investment firm with 1,500 clients from
throughout Latin America, the United States and Europe.
Years ago, Korngold conceived a plan to open a business that would facilitate cross-border trade through loan guarantees and letters of credit.
But, he and his partner changed course when the banking crisis hit Latin America in the 1980s. Korngold knew from studying patterns of economic crises as an economist that Latin Americans would be seeking a safe haven of stable securities for their depreciating currency.
For 26 years now, Korngold and his team have been capturing Mexican wealth, growing it and helping clients secure investments according to their risk tolerance.
Today, because the economic growth in northern Mexico and Texas has been so tremendous, Korngold's firm and a handful of prominent Mexican partners are planning to open a bank to serve the needs of Mexicans who have made San Antonio and Texas their second home.
Alta International Bank will open in four months in the high-wealth, high-growth region of San Antonio known as Stone Oak. That is the area where Korngold and other economists estimate that at least 40,000 Mexican families have set up second homes.
Soon after, they plan to open banks in Laredo, McAllen, and eventually in Monterrey and Mexico City.
"We'll be what we call a NAFTA bank," Korngold says.
In about a year, the bank will open representative offices in Mexico to help business owners secure loans and letters of credit for U.S. trade ventures.
The bank opening is in many ways a return to the Korngold's original plan.
"I think thatthe impactthat NAFTA has had over the Mexican economy and the strategic decisions of Texas as a border state has brought us back to the original basis of the business," Korngold says.
Since having abandoned and returned to the plan, though, regional banks such as IBC Bank, Frost Bank and Laredo National Bank, have stepped in to fill the niche.
Alta will also face new competitors getting ready to enter the scene, such as Spain's Banco Bilbao Vizcaya Argentaria, which recently bought Alabama-based regional bank, Compass Bank. Compass operates 415 banks in the Sun Belt, with 164 inTexas. BBVAalso operates Mexico's largest bank, Bancomer.
"There are many banks in San Antonio and many of them have departments that have been tailored to the Mexican
client," says Jorge Gonzalez, professor of economics at Trinity University in San Antonio. "However, if this new bank is able to offer better services, there is a market there. It's just a matter of providing a better service."
Gonzalez says a niche bank providing a high-quality service could definitely succeed with even just a few thousand customers.
"If the few people you have (in your bank) are high-net worth individuals, you do not need a million clients to make a lot of money," Gonzalez says.
While BBVA and larger international banks already have a foothold in lending to bigger corporations, Alta and its Mexican partners at Consultorfa Financiera Especializada (COFINE) will focus on small and medium-size Mexican companies.
"These big banks are focused on the big players in the market," said Enrique Castilla, a partner at Monterrey-based COFINE. "We are focused on a special market-helping small and medium-sized companies."
Korngold and his partners say they hope to capture the business of the next wave of Mexicans choosing to reside in Texas and eventually to take existing market share from other banks.
"To compete is difficult. They may have to compete with us and us with them," Korngold says. "We will offer [clients] both in terms of banking and wealth management a greater array of services that the other banks are not into. I'm convinced that we know better what the market needs."
Korngold says though he and his partners will some day offer services to the broader community of Mexican nationals living in the United States, their initial opening will be low-key and will cater to well-to-do Mexicans.
"We don't foresee any TV campaigns or mass media campaigns," Korngold says. "It will be on a one-to-one basis as a result of the circle of influence that the board members have and the new management."
The chairman and CEO for the new bank will be Glenn Biggs, who has served on various boards in San Antonio, including at Valero Energy. The president will be Matt Murphy, former president of Texas Heritage Bank. Half of the bank ownership is made up of U.S. partners and half Mexican.
Korngold says the Mexican partners individuals who have played key leadership roles in some of Mexico's largest banks are not yet ready to be named.
"I think this [new bank] would be a help for some people," says Javier Smith, president of the Asociación de Empresarios Mexicanos en San Antonio.
"San Antonio is becoming a platform for launching Mexican businesses," Smith says. "It is the most Mexican city in the U.S. with people with high levels of income and education establishing businesses here. It is a good opportunity."
Mexicans are establishing second homes and businesses in San Antonio because NAFTA has made it easier for
Mexican nationals to reside temporarily in the United States if they are opening businesses or establishing branches of their existing businesses.
Additionally, many Mexicans are choosing to establish homes in San Antonio and other U.S. cities because of the perception that their families are safer away from Mexico.
And like many U.S. investors, Mexicans are turning to Texas real estate because they believe it is a good holding.
"Mexicans are buying second homes in San Antonio, Austin and South Padre Island because it's a good investment," says Castilla, Korngold's business partner at COFINE.
Castilla has also worked with Korngold as a client of Intercontinental for 15 years.
"Texas is one of the most important economies in United States and some of that growth is because of the people in Mexico who are putting money there," Castilla says.
"We as COFINE have inside our portfolio real estate investments in South Padre island because it's growing so fast."
And with the weather improving, Castilla says he has plans to visit his properties in the United States as soon as he can take a break from his growing business. +
Isidoro Korngold and his Mexican partners are launching Alta International Bank in Texas to capture the lucrative market of Mexicans with second homes in the state.
PODER MAGAZINE
APRIL 2007
By Analisa Nazareno, San Antonio
Swirls of red-painted steel soar 65 feet into the San Antonio sky, not too far from the low-key, limestone tourist attraction known as The Alamo.
The red statue -- a gift from the Asociación de Empresarios Mexicanos en San Antonio -- stands as a gigantic monument to the transforming power of NAFTA.
A few blocks away, in the Bank of America building, Isidoro Korngold, who watched as the statue went up, has seen the many other ways that the Mexican elite have changed the landscape of this city.
Because of NAFTA, the region encompassing the northern states of Mexico and the Texas border, Korngold says, is "a machine for growth" with Mexicans setting up second homes and businesses in Texas and creating wealth in the
United States.
As a portfolio manager and as a banker, he says: "We want to capture that."
Peruvian native and a Wharton School of the University of Pennsylvania graduate-is co-founder of San Antonio-based Intercontinental Asset Management Co., an independent investment firm with 1,500 clients from
throughout Latin America, the United States and Europe.
Years ago, Korngold conceived a plan to open a business that would facilitate cross-border trade through loan guarantees and letters of credit.
But, he and his partner changed course when the banking crisis hit Latin America in the 1980s. Korngold knew from studying patterns of economic crises as an economist that Latin Americans would be seeking a safe haven of stable securities for their depreciating currency.
For 26 years now, Korngold and his team have been capturing Mexican wealth, growing it and helping clients secure investments according to their risk tolerance.
Today, because the economic growth in northern Mexico and Texas has been so tremendous, Korngold's firm and a handful of prominent Mexican partners are planning to open a bank to serve the needs of Mexicans who have made San Antonio and Texas their second home.
Alta International Bank will open in four months in the high-wealth, high-growth region of San Antonio known as Stone Oak. That is the area where Korngold and other economists estimate that at least 40,000 Mexican families have set up second homes.
Soon after, they plan to open banks in Laredo, McAllen, and eventually in Monterrey and Mexico City.
"We'll be what we call a NAFTA bank," Korngold says.
In about a year, the bank will open representative offices in Mexico to help business owners secure loans and letters of credit for U.S. trade ventures.
The bank opening is in many ways a return to the Korngold's original plan.
"I think thatthe impactthat NAFTA has had over the Mexican economy and the strategic decisions of Texas as a border state has brought us back to the original basis of the business," Korngold says.
Since having abandoned and returned to the plan, though, regional banks such as IBC Bank, Frost Bank and Laredo National Bank, have stepped in to fill the niche.
Alta will also face new competitors getting ready to enter the scene, such as Spain's Banco Bilbao Vizcaya Argentaria, which recently bought Alabama-based regional bank, Compass Bank. Compass operates 415 banks in the Sun Belt, with 164 inTexas. BBVAalso operates Mexico's largest bank, Bancomer.
"There are many banks in San Antonio and many of them have departments that have been tailored to the Mexican
client," says Jorge Gonzalez, professor of economics at Trinity University in San Antonio. "However, if this new bank is able to offer better services, there is a market there. It's just a matter of providing a better service."
Gonzalez says a niche bank providing a high-quality service could definitely succeed with even just a few thousand customers.
"If the few people you have (in your bank) are high-net worth individuals, you do not need a million clients to make a lot of money," Gonzalez says.
While BBVA and larger international banks already have a foothold in lending to bigger corporations, Alta and its Mexican partners at Consultorfa Financiera Especializada (COFINE) will focus on small and medium-size Mexican companies.
"These big banks are focused on the big players in the market," said Enrique Castilla, a partner at Monterrey-based COFINE. "We are focused on a special market-helping small and medium-sized companies."
Korngold and his partners say they hope to capture the business of the next wave of Mexicans choosing to reside in Texas and eventually to take existing market share from other banks.
"To compete is difficult. They may have to compete with us and us with them," Korngold says. "We will offer [clients] both in terms of banking and wealth management a greater array of services that the other banks are not into. I'm convinced that we know better what the market needs."
Korngold says though he and his partners will some day offer services to the broader community of Mexican nationals living in the United States, their initial opening will be low-key and will cater to well-to-do Mexicans.
"We don't foresee any TV campaigns or mass media campaigns," Korngold says. "It will be on a one-to-one basis as a result of the circle of influence that the board members have and the new management."
The chairman and CEO for the new bank will be Glenn Biggs, who has served on various boards in San Antonio, including at Valero Energy. The president will be Matt Murphy, former president of Texas Heritage Bank. Half of the bank ownership is made up of U.S. partners and half Mexican.
Korngold says the Mexican partners individuals who have played key leadership roles in some of Mexico's largest banks are not yet ready to be named.
"I think this [new bank] would be a help for some people," says Javier Smith, president of the Asociación de Empresarios Mexicanos en San Antonio.
"San Antonio is becoming a platform for launching Mexican businesses," Smith says. "It is the most Mexican city in the U.S. with people with high levels of income and education establishing businesses here. It is a good opportunity."
Mexicans are establishing second homes and businesses in San Antonio because NAFTA has made it easier for
Mexican nationals to reside temporarily in the United States if they are opening businesses or establishing branches of their existing businesses.
Additionally, many Mexicans are choosing to establish homes in San Antonio and other U.S. cities because of the perception that their families are safer away from Mexico.
And like many U.S. investors, Mexicans are turning to Texas real estate because they believe it is a good holding.
"Mexicans are buying second homes in San Antonio, Austin and South Padre Island because it's a good investment," says Castilla, Korngold's business partner at COFINE.
Castilla has also worked with Korngold as a client of Intercontinental for 15 years.
"Texas is one of the most important economies in United States and some of that growth is because of the people in Mexico who are putting money there," Castilla says.
"We as COFINE have inside our portfolio real estate investments in South Padre island because it's growing so fast."
And with the weather improving, Castilla says he has plans to visit his properties in the United States as soon as he can take a break from his growing business. +
