Grupo SURA: Diversified

THE COMPANY: Grupo de Inversiones Suramericana (Group Sura) is a holding company listed on the Colombian bourse. It has an investment portfolio grouped into two main segments: the first, called Strategic Investments, integrates financial services, pensions, insurance and social security, as well as complementary services sectors. The second, called Portfolio Investments, comprises mainly the food, cement and energy sectors. Regarding the company’s assets, the holding has stakes in other publicly-traded companies which are also a part of the broad local market index. In the food sector Grupo Sura holds approximately 35.2% of Grupo Nutresa (NCH.CN). In the cement, real estate and energy sectors it has a 35.8% interest in Grupo Argos (ARG.CN), and in the financial sector it holds 26.7% of Bancolombia’s Stock (BIC.CN). Together these three investments make up 29.4% of the market index and approximately 62% of Grupo Sura’s total assets. It is worth mentioning that Grupo Nutresa, Grupo Sura, Grupo Argos and its operational subsidiaries contribute more than 6.7% to Colombian national GDP and generate more than 110,000 jobs. Grupo Sura’s portfolio companies hold positions of leadership in their respective markets. Bancolombia is the number one universal bank by total assets, deposits, profits and number of branches in Colombia and El Salvador. Grupo Argos is the largest firm in the Colombian cement industry with a 51% market share, fifth-largest cement producer in Latin America and fourth concrete producer in North America. Moreover, this company has assets in the real estate, port and coal sectors. Grupo Nutresa is the largest food conglomerate in Colombia, with 61.1% market share. Additionally, it has a presence in 75 countries, distribution networks in 12 countries, including Colombia, and production facilities in eight. Currently the company has a market capitalisation of COP23trn ($13bn) and a weight of 13.4% in the local index. It is trading at a price-to-book ratio of 1.07x, which constitutes a rich valuation given the historical multiple (0.97x), but could be explained by the structural changes as a result of the acquisition of ING assets. Grupo Sura was ratified, for the second consecutive year, as one of the 340 companies that are part of the Dow Jones Sustainability Index (DJSI), a leading indicator that assesses the economic, social and environmental performance of companies in the world, being one of the four Colombian organisations named in this list.

DEVELOPMENT STRATEGY: Grupo Sura is currently investing in its international expansion plan. By the end of 2017, the company plans to triple the book value it had in 2007, backed by its international investment portfolio, consisting of leading innovative companies that develop new markets to reach different segments of the population, and who share a business philosophy based on a commitment to sustainable development. Their investment philosophy seeks companies that meet requisites such as political, social and macroeconomic stability, growth potential, market leadership, adequate corporate governance and good reputation.

The most significant acquisition because of its size and the leadership position of the acquired assets was the buyout of the Latin American pension, insurance and mutual fund businesses to the Dutch Group ING. With the aforementioned transaction, Sura Asset Management (the company created to hold the assets acquired from ING) became the number-one pension firm in Latin America, with 15m clients, assets under management of $103bn and 8800 employees. The Bolivar Group, the IFC, Bancolombia and General Atlantic entered as co-investors in this transaction. In 2012 Sura Asset Management, as part of the process initiated in 2011 and in order to strengthen the supply of products and services in the markets where it operated, announced the purchase of InVita Life Insurance and Pensions and InCasa, after fulfilling the requirements of Peruvian national regulators.

Going forward, the holding plans to continue its aggressive international expansion strategy, The company has identified target countries including Mexico, El Salvador, Costa Rica, Panama, Chile and Uruguay.