Prudential to Sell Stake in Mexican Pension Manager to Bank

(October 21, 2011) — Newark, N.J.-based Prudential Financial has announced that it will sell its stake in Afore XXI S.A. de C.V., a private pension fund manager in Mexico, for an estimated $200 million to Banorte, Mexico’s fourth-largest bank by assets.

“The was really just a strategic decision on behalf of the entire company,” Prudential spokeswoman Lisa Villareal told aiCIO. “While we agreed to sell a portion of our business, we still have three businesses there and we plan on having a strong presence in Mexico. We’re committed to the Mexican market and view it as a place of tremendous growth and opportunity.”

According to a press release by Prudential, which had $883 billion of assets under management as of June 30, the book value of the financial firm’s stake in Afore XXI was $75 million as of December 31, 2010. The transaction is expected to close by the end of the year, following regulatory approval.

While Prudential agreed to sell its stake in Afore XXI S.A. de C.V., it still has an active presence in the Mexican market through Prudential Seguros, the company’s life insurance business, Prudential Real Estate Investors, and Prudential Relocation. The statement by the firm noted that these business, unaffected by the sale of Afore XXI, will continue to operate in Mexico.

In August, Banorte revealed that the deal will create Mexico’s largest pension fund manager in terms of numbers of accounts and the fourth largest by assets under management. According to data from the fund’s regulator obtained by Reuters, the new fund will have about 196.3 billion pesos ($14.3 billion) in assets.