We warmly welcome our new Vice President of Investment Platforms, Allan Arguello, to the Singular family, it is a pleasure to have a star recruit in our team.
We share with you this interview conducted by Lucero Maldonado and published in Martes Financiero.
An out-of-the-box investor with a vast knowledge of alternative markets joins Singular's team.
Allan Argüello recently took on a new challenge as Vice President of Investment Platforms at the Panamanian firm Singular Wealth Management.
With a Panamanian mother and Nicaraguan father, he was born in the United States, along with his twin brother, while his father was pursuing a master's degree.
"From an early age I wanted to be linked to the financial world: my dad was a banker in Nicaragua and I had an affinity for numbers and the economic engine." He was Senior Director of Business Development at Grupo Eleta; previously worked as Manager of Corporate Finance and Investment Banking at Indesa; and as a senior associate at JP Morgan.
From your time at Notre Dame, which class impacted you?
The Microcredit class, I was very interested in the book 'Banker to the Poor' by Muhammad Yunus, Nobel Peace Prize winner, on how microcredit fosters the economy and supports the growth of economic and social strata.
The first major challenge at JP Morgan
Within a year, I was put in charge of the region and put together marketing material for clients, structuring products and training associates. I went on to support more than 12 countries and 100 customers in Latin America.
After this financial background, what was the next stop?
I jumped to Indesa. I was still in pursuit of that continuous and demanding learning. I was attracted to investment banking and wanted to learn about relevant transactions and how it affects industries. At Indesa I had the joy of working with all the partners who were great mentors. I focused on mergers and acquisitions, treasury and Indesa's private equity fund.
Then, I decided it was time to acquire other skills and went to do an MBA at Georgetown University, where I specialized in private markets and alternative investments. The final thesis of my group was to work on a project with one of Abu Dhabi's sovereign wealth funds, Mubadala, on the private equity side.
Tell us about your specialization in alternative investments.
Alternative investments are illiquid, typically private and complex investments. Their main benefit is to be able to access a higher return with less correlation to traditional investments.
Why has Singular decided to bring in an alternatives specialist to lead its investment platform?
Alternatives are too useful to ignore. Investing in alternatives is a growing trend and Singular does not want to be left behind. Given the complexity of these products, it is important to have a specialist. Typically, alternatives have been the domain of institutional investors able to keep their capital locked up for long periods. In exchange for sacrificing access to liquidity, they benefit from the more attractive returns offered by these complex solutions. However, recent developments in the alternative asset space are lowering these barriers to entry. Access is therefore being "democratized". They can be deployed to meet a variety of objectives, from helping to mitigate volatility to hedge against inflation, and can even be used to lock in income or enhance returns. Consequently, to stay ahead of the curve it was important for Singular to adopt these types of investments into its offering.
And from your side, what attracted you to Singular?
I really liked that it is a boutique firm offering independent wealth management for the clientis not dependent on any bank and therefore makes a tailor-made suit for each client. In addition, it is innovative and entrepreneurial
How do you see the evolution of traditional investments towards the so-called alternatives?
Traditional portfolios consist of two basic assets: stocks and bonds. Investors hold a combination of the two, 60% of stocks and 40% of bonds. Historically, they have moved in opposite directions; mitigating volatility. In recent years, instead of offsetting each other, stocks and bonds have begun to move in the same direction; increasing volatility. In 2022, both stocks and bonds suffered losses. In 2023, both stocks and bonds rose. Investment theory suggests that a diversified mix of assets and strategies will improve risk and return outcomes. If the traditional ones cannot provide the required diversification, this is where alternatives come in to play an interesting role.
What characterizes you as a wealth manager?
I consider that my strength is based on three main characteristics. One, investment banking opened me the perspective of analysis and strategy, because as one has to analyze the company with CEOs and senior executives, one is forced to break down a company. Two, I think the capillarity of my contacts, a product of my experience. I have a fairly global approach having worked with several investors and managers in Latin America, the United States and Europe. Third, my strategic creativity has distinguished me, I am not satisfied with the status quo and I am able to go into detail, without losing sight of the macro objective.
Is an innovative investor
Yes, definitely. I break the traditional mold, I try to innovate and look for investments out of the ordinary, because you can easily get stuck looking at what you have in your immediate region. I love to maintain relationships with people all over the world and that is part of what I bring to the table, to be able to say: we have to look in India, in Japan, in Europe, because if not, we are going to offer customers more of the same as a commodity.
What is your vision of Panama's role as a regional hub for the securities market?
Panama has all the ingredients to be a true investment hub. The financial investment balance has two legs: public and private. In the public sector, with the stock exchange, Panama is doing very well. In the private sector, there is room for improvement. We must attract better and better managers and institutional investors to Panama. Panama has everything to become the London of Latin America in terms of finance. If it achieves this, it will naturally become a wealth hub.
What role will Singular play in this hub position?
Singular must continue to help lead these innovation efforts. Focused on giving greater access to other investors, having more capillarity with global exchanges, attracting more new issuers and offering better products.
Thus, how Latinex supports
Latinex is one of the niches in Panama that has really done very well. They have been growing steadily and constantly innovating. Latinex offers transparency, legal security, supervision and financial technology. All this leads to a more sophisticated and dynamic market. One example is CIFI's recent green bond issuance with Euroclear.
What is your general view of the markets today?
We are in a period of change/rebalancing globally going through a lot of uncertainty; all centered around rates and inflation. We are coming from the longest period of economic and stock market expansion in history (2009-2020). As a result of that unbridled growth and Covid, inflation got out of hand and rates rose at the fastest pace in history.
Each cycle presents very different investment opportunities. I have a very sector-based investment philosophy of long-term trends. Therefore, I tend to invest in trends that go beyond the macro, that are going to define the environment for the next 5 to 10 years. Some of the ones I follow are: artificial intelligenceThe company's activities include: energy transition, regionalization of value chains, industry automation, cybersecurity, digital infrastructure, logistics, security, digitalization and health.
How do you structure an investment portfolio that mitigates risk?
My focus is on the client. It all starts with doing a thorough due diligence of the client's profile to understand aspirations, risk tolerance, liquidity needs, time horizon, return expectations and constraints. One thing that is probably not commonly done is to visualize the entire portfolio. If a client doesn't put all of their wealth in Singular, as an advisor I have a responsibility to be able to visualize all of their wealth, because there is no point in recommending something that is correlated with other investments they already have. The goal is diversification to mitigate volatility.
The advice he repeats to clients about their assets
(1) build a portfolio based on ALL your assets. Do not only think about the liquidity you have at the moment, (2) the longer term the better. Build an investment strategy that lasts over time and adjust when prudent, (3) take into account your liquidity needs and periodicity and (4) don't invest because others are doing it.
How does Singular anticipate what heritage clients are asking for worldwide?
Being at the forefront with multiple innovative products and the following qualities: stable returns, access to liquidity and low volatility. Given the ever-changing financial world, this is no easy task, as you have to be aware of what is new and innovative. One has to be informed. On this front, Singular has done very well, garnering relationships all over the place.
In this regard, how it is updated in favor of its customers
I love the topic of learning. I just got back from Boston, I was in a course at Harvard on investment management. There were 40 of us students: next to me was a Qatari sovereign wealth fund manager; on my other side was a Saudi Arabian sovereign wealth fund manager; another was one of Jeff Bezos' portfolio advisors. The program was structured to work in groups of 8 and break down 12 investment product cases. The dormitory was next to the classroom, an eight-room apartment and a living room where each morning we discussed the cases. When we came to class, executives from the companies would participate in real time. Consequently, being able to surround myself and share with these types of investors, advisors and academics was an enriching experience, in addition to cultivating my network of contacts.
Speaking of learning, a book:
I mention a book and a podcast, I am a fan of podcasts, I listen to 'In Good Company', by the CEO of the World's largest Sovereign Wealth Fund, Norges Bank Investment Management, with over 9,000 investments in global public companies, a fund of $USD 1.7 trillion. He invites CEOs to talk about a strategic and emotional approach.
One book, would be the novel based on a true story 'Red Notice: A True Story of High Finance, Murder, and One Man's Fight for Justice' by Bill Browder, about the first American who set up a fund, Hermitage Capital, in Russia in the 90s and went on to own almost 10% of Russia's largest companies. It's about how Putin and the oligarchs are going against him because of his success.
Do you practice any sport?
I have always been a very active and committed athlete. As a child I competed in tennis at an international level and that gave me the mental attitude and discipline. My mother was a psychologist and the emotional intelligence aspect is an aspect I always emphasize. I also play golf, but my passion is paddle tennis. In general, sport de-stresses me.
From a Nicaraguan father, a place in that country that you recommend
The most beautiful thing about Nicaragua is its nature. I love the Cerro Negro volcano, an active volcano where you can slide on a board, surfing style, while watching the lakes and volcanoes. A unique experience.
What about Panama?
Tierras Altas in Chiriqui, its natural beauty and being able to have a volcano from which you can see both oceans, you can't have that anywhere in the world.
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