Larrain Vial

KYCO: Know Your Company

Reveal Profile

19 December 2025

1) Overview of the Company

Larraín Vial SpA is a Chilean financial holding company founded in 1934 by brothers Fernando and Leonidas Larraín Vial, operating as one of Latin America’s leading independent financial services firms. Headquartered in Las Condes, Santiago, Chile at Avenida El Bosque Norte 0177, the company operates through multiple subsidiaries across Chile, Peru, Colombia, Mexico, and the United States, serving over 50,000 clients in 35 countries with approximately 850-1,000 employees. The firm manages over USD 28 billion in assets under management and distributes over USD 35 billion in assets, with fund managers overseeing more than USD 10 billion across 40+ mutual and investment funds.

The company operates through three primary business divisions: LarrainVial Capital encompassing capital markets, research, and corporate finance services for institutional clients; Wealth Management providing personalized investment advice to private clients managing over USD 12 billion in assets; and Asset Management specializing in mutual funds, investment funds, and private equity with LarrainVial Asset Management serving as the largest non-banking asset manager in Chile. Through its US subsidiary LarrainVial Securities US LLC, established in 2010 as the first Chilean broker-dealer registered with the US Securities and Exchange Commission and FINRA, the firm facilitates access to Latin American securities for US institutional investors.

The firm maintains strategic partnerships with global asset managers including a 15+ year relationship with Invesco, representing over USD 4.5 billion of client assets in Invesco products and raising nearly USD 2 billion since January 2023 through US-domiciled ETF distribution. LarrainVial’s research department, founded in 1992, has received recognition from Latin Finance, Institutional Investor, Consensus Economics, and Thomson Reuters, with its equity strategy team projecting IPSA index targets of 10,200-10,500 points over twelve months. The company celebrated its 90th anniversary in April 2024 with Chairman Fernando Larraín ringing the closing bell at NASDAQ, reinforcing its position as a bridge between Latin American and global capital markets.

2) History

Larraín Vial SpA was founded in 1934 by brothers Fernando and Leonidas Larraín Vial, establishing one of the first stock brokerage firms in Chile. In 1958, Fernando Larraín Peña joined the company and performed the first corporate financial analyses, giving rise to the current research department. During the 1960s, the brokerage firm expanded its activities from stock and fixed income brokerage to foreign exchange trading.

The company faced three major crises during its early decades: the prohibition to trade in dollars in 1964, the crisis of the Unidad Popular government in the early 1970s, and the crisis of the financial system in the early 1980s. With the enactment of the Corporations Law and the Securities Market Law in 1981, a modern legal framework for the issuance and trading of securities was established in Chile, creating demand for financial instruments through the individually funded pension system. LarrainVial brokerage firm became incorporated in 1985 and created its commercial area, subsequently carrying out the first IPO of a non-state-owned company, Eléctrica Pilmaiquén, in 1989.

The return to democracy and strong economic growth in the early 1990s produced a revolution in the Chilean capital market, during which LarrainVial formally created its research department (now LarrainVial Research) and its Corporate Finance division. The subsidiary LarrainVial Asset Management AGF was established in 1998, and since then, the company has been the leading advisor for stock market listings in the local market, participating in around 70% of the processes carried out through 2024.

Between 2002 and 2006, LarrainVial underwent significant expansion and diversification, creating the Investment Fund Management Company in 2001 and structuring its first commercial paper in 2002, becoming the first market maker in the Chilean stock market. In 2003, a Product Distribution Desk for Institutional Investors (DP3) was created, focused on representing and distributing international funds. The company opened a new branch on El Bosque Street in Santiago in 2004 and launched LVA Indices in 2005, specializing in the construction of indexes for the Latin American market.

LarrainVial became the first Chilean financial company to register as a broker-dealer in the United States in 2010 through LV Securities US LLC, giving U.S. institutional investors access to securities of Latin American companies. Between 2016 and 2023, the company achieved several pioneering milestones, including being the first to advise an investment fund bond issue in Chile and to launch a simplified mobile app in its sector. In 2019, LarrainVial obtained the highest rating in asset management from S&P, becoming the only Chilean company to achieve this distinction. LV Distribution was launched in the U.S. in 2023, marking an unprecedented step for a Chilean financial company in that market.

3) Key Executives

Fernando Larraín serves as President of LarrainVial SpA, a position he has held since joining the company in 1987. He holds a Business Administration degree from Pontificia Universidad Católica de Chile and an MBA from Harvard Business School. Larraín serves as president of the board of LarrainVial SAFI Perú and holds director positions at Bolsa de Comercio de Santiago, Watt’s S.A., Activa SpA, and Fundación Las Rosas.

Juan Luis Correa serves as Chief Executive Officer of LarrainVial SpA. He holds a Business Administration degree from Universidad de Chile and an MBA from IESE, Universidad de Navarra, Spain. Correa has emphasized the firm’s systematic strengthening of its partnership model, where executives with distinguished trajectories contribute to the company from corporate governance positions.

Andrés Trivelli serves as Chief Executive Officer of LarrainVial Corredora de Bolsa. He joined LarrainVial in 2004, initially serving as Institutional Distribution Manager before his appointment as CEO. Prior to joining the firm, he worked in commercial operations at Compañía Minera Doña Inés de Collahuasi. Trivelli holds a Civil Industrial Engineering degree from Universidad de Chile and an MBA from Cornell University.

Felipe Porzio serves as Director of Corporate Finance at LarrainVial. He holds a Business Administration degree from Pontificia Universidad Católica de Chile and a Master of Science in Management from Stanford University. Porzio has been responsible for leading the Corporate Finance division’s operations.

Ladislao Larraín serves as Chief Executive Officer of LarrainVial Asset Management and holds partnership status within the firm. He holds a Business Administration degree, Master’s in Financial Economics from Pontificia Universidad Católica de Chile, and an MBA from IESE, Universidad de Navarra, Spain. He joined LarrainVial in 2001 after working as a professor and researcher at Universidad de los Andes, and has served as CEO of LarrainVial Asset Management since 2011.

Gonzalo Córdova serves as Chief Executive Officer of Gestión Patrimonial and holds director status within LarrainVial Corredora de Bolsa. He joined LarrainVial in 2002 in the high-net-worth clients area. He previously worked at BCI, Black & Decker in the United States, and served as Finance and Administration Manager at Textiles América and Litco Co. Córdova holds a Business Administration degree from Universidad Diego Portales and an MBA and Master of Science in Finance from Loyola University Maryland.

Leonardo Suárez serves as Director of Research and Managing Director. He holds an Economics degree from Universidad de Guayaquil, Ecuador. Suárez leads the research department that has received recognition from Latin Finance, Institutional Investor, Consensus Economics, and Thomson Reuters for the quality of their analysis.

José Manuel Silva serves as Director of Investments at LarrainVial Asset Management. He holds a Business Administration degree from Pontificia Universidad Católica de Chile. Silva joined LarrainVial in 1997 as Head of the Research Department before transitioning to his current investment role, and previously served as CFO of Santa Carolina.

Claudio Larraín serves as Chief Executive Officer of LarrainVial Securities US LLC and Director of LarrainVial Corredora de Bolsa. He joined LarrainVial in 1994 and is responsible for Institutional Distribution. Larraín holds a Business Administration degree from Universidad de Chile and an MBA from University of Miami.

Christian Villouta serves as Chief Financial Officer of LarrainVial, responsible for the firm’s financial operations and reporting.

4) Ownership

Larraín Vial SpA operates as a private limited liability company (Sociedad por Acciones) with a complex ownership structure comprising multiple indirect shareholders through holding companies. The ultimate ownership traces back to natural persons with ownership concentration among founding family members and their controlled entities, as disclosed through the company’s US subsidiary reporting.

LarrainVial Securities US LLC, the firm’s wholly-owned US subsidiary, demonstrates the parent company’s controlling structure with Larraín Vial SpA holding 75% or more ownership as the managing member since November 2009. The indirect ownership structure reveals several key holding companies including Inversiones Sodeia SpA, which holds a 75% or more stake in Chacabuco S.A., and Chacabuco S.A. maintaining a 25% to 50% ownership position in Larraín Vial SpA established in November 2009.

The ownership structure includes Rentas VC Ltda. holding 50% to 75% of Rentas ST Limitada through a relationship established in June 2017, with Rentas ST Limitada maintaining a 25% to 50% ownership stake in Larraín Vial SpA dating to November 2009. Individual ownership is represented by Leonidas Anibal Vial, who holds a 25% to 50% stake in Rentas ST Limitada through a shareholding relationship established in December 2012, demonstrating the founding family’s continued involvement in the ownership structure.

The corporate structure enables management control through a partnership model where senior executives and partners participate in ownership while maintaining professional management of daily operations. The company’s Legal Entity Identifier registration confirms its status as an active Sociedad por Acciones with registration number 93883000-2 under Chilean tax authority supervision, established January 1, 1993.

Recent ownership developments include LarrainVial Asset Management maintaining a structured ownership arrangement where LarrainVial SpA holds 75% and Consorcio Financiero S.A. holds 25%, following a 2009 merger that created the current asset management ownership structure. The firm has expanded its international ownership presence through strategic acquisitions, including the March 2024 purchase of a 25% stake in Edinburgh-based Aubrey Capital Management and the December 2024 acquisition of 10.18% of Canadian company Aclara Resources.

5) Financial Position

Larraín Vial SpA demonstrates solid financial health as a privately-held company through multiple proxy indicators, with the firm managing over USD 28 billion in assets under management and distributing over USD 35 billion in assets as of December 2024. The company’s asset management division oversees more than USD 10 billion across 40+ mutual and investment funds, while wealth management operations manage over USD 12 billion in client assets, indicating substantial revenue-generating capacity.

Employee headcount has expanded to approximately 850-1,000 professionals across five countries, representing sustained growth in operational capacity and market presence. This workforce growth aligns with the firm’s geographic expansion, including the establishment of new operations in Mexico City in 2024 and strategic acquisitions such as the 25% ownership interest in Edinburgh-based Aubrey Capital Management. The international expansion demonstrates financial strength sufficient to pursue strategic investments while maintaining operational stability.

Credit rating indicators reflect institutional confidence, with LarrainVial Asset Management maintaining an AMP-1 (Very Strong) rating from S&P Global Ratings since 2019, making it the only third-party fund manager in Chile to achieve this distinction and one of only five entities in Latin America with this rating. This rating assessment specifically highlighted the firm’s strong business profile, experienced management team, well-structured investment processes, and very strong risk management capabilities.

Infrastructure investments signal robust financial positioning, including the 2024 opening of six service stations and facility modernization across multiple locations. The company’s technological infrastructure investments include maintaining over 90 professionals managing assets through various vehicles and developing centralized risk control structures across all asset management units. The firm’s ability to sustain significant personnel costs while investing in technology development indicates healthy cash flow generation.

Strategic acquisition activity demonstrates available capital deployment capacity, with notable transactions including the March 2024 purchase of a 25% stake in Aubrey Capital Management and the December 2024 acquisition of 10.18% of Canadian company Aclara Resources. These cross-border investments suggest sufficient liquidity to pursue diversification opportunities while maintaining core business operations across multiple jurisdictions.

Revenue diversification provides financial stability, with recurring revenues accounting for 58% of total earnings in 2024, validating the firm’s strategic focus on fund management business which represents over 40% of total ordinary income. The fund management segment’s growth trajectory supports sustained financial performance, with LarrainVial Asset Management ranking as the fifth largest manager in the Chilean local market with a 5.4% market share.

The firm’s US subsidiary LarrainVial Securities US LLC maintains registered status with the SEC and FINRA, requiring compliance with regulatory capital requirements and demonstrating financial adequacy for international broker-dealer operations. This regulatory approval process necessitates ongoing demonstration of financial stability and operational capacity to serve institutional investors across Latin American securities markets.

6) Market Position

Larraín Vial SpA maintains a commanding market position in Latin American financial services, ranking as the number one equity trading firm in Chile with a 22% market share in 2024 and operating as the largest non-banking asset manager in the country. The firm holds the top position in amounts transacted by stockbrokers in Chile and ranks third in total assets under management with an 8.6% market share, while leading non-money market fund AUM with an 11.3% market share. LarrainVial Asset Management stands as the fifth largest manager in the Chilean local market with a 5.4% market share, maintaining its AMP-1 (Very Strong) rating from S&P Global Ratings as the only third-party fund manager in Chile to achieve this distinction.

The company’s competitive positioning extends across multiple jurisdictions, maintaining significant market presence in Peru with a 26% share of AUM distributed to pension fund managers and Colombia where it ranks fifth in equity transactions with a 9.9% market share. In the Andean region, LarrainVial achieved a 17% market share representing total trading volume on Chilean, Peruvian, and Colombian stock exchanges as of 2019, demonstrating regional leadership in equity trading. The firm’s research department, founded in 1992, has received recognition from Latin Finance, Institutional Investor, Consensus Economics, and Thomson Reuters, with its equity strategy team maintaining analytical coverage across Basic Materials, Industrials, Consumer Goods, Consumer Services, Telecommunications, Utilities, Financials, and Technology sectors.

Strategic partnerships enhance the firm’s distribution capabilities, notably its 15+ year relationship with Invesco representing over USD 4.5 billion of client assets in Invesco products and raising nearly USD 2 billion since January 2023 through US-domiciled ETF distribution. The company operates as the exclusive Latin American partner for several global asset managers, facilitating cross-border investment flows between international institutions and regional securities markets through its US subsidiary LarrainVial Securities US LLC. Client concentration demonstrates strong institutional relationships, with approximately 21% institutional clients, 45% private banking clients, and 22% retail distributors, indicating diversified revenue streams across client segments.

LarrainVial’s operational capabilities encompass comprehensive capital markets infrastructure, including prime services with full regional custody, clearing services, corporate action services, securities lending, and access to hard-to-borrow equities through a 24/7 full-service platform. The firm’s research coverage extends to 17 professionals providing fundamental analysis across Chile, Colombia, and Peru, supporting investment decisions for over 50,000 clients in 35 countries. Distribution channel strength includes direct access to Chilean, Peruvian, Brazilian, Colombian, and Mexican markets through a single counterparty, with electronic transactional platforms enabling clients to access Brazilian and U.S. stock exchanges from Chile.

Brand recognition in wealth management includes awards from Global Finance, The Banker, and Euromoney for best Chilean high net worth advisory firm and best investment team for high net worth clients in Latin America 2024. The firm’s fund management capabilities operate through over 70 professionals managing assets across various vehicles, including 34 mutual funds and 31 public investment funds, with three funds domiciled in SICAV Luxembourg and two funds domiciled in Cayman. Technology infrastructure investments include LVA Indices specializing in index construction for the Latin American market and algorithmic trading capabilities providing direct market access and top execution solutions.

7) Legal Claims and Actions

The Chilean Financial Market Commission (CMF) initiated administrative proceedings against LarrainVial’s subsidiary Larraín Vial Activos AGF and its directors regarding the Structured Capital I investment fund in October 2024. The CMF imposed a fiscal fine of 60,000 Unidades de Fomento (UF) on Larraín Vial Activos AGF and additional penalties on former directors for various breaches of Laws No. 18.045 and the Unified Fund Law, along with violations of related circulars and general rules. The allegations specifically cite violations of Article 65 of Law 18045, which requires advertising to not mislead or confuse the public about securities characteristics and mandates truthful, sufficient, and timely information for contributors.

In December 2024, the Chilean Public Prosecutor’s Office announced it would formalize charges against 13 individuals, including eight executives and directors from Larraín Vial, for alleged crimes including money laundering, fraud, and unfair administration related to the Capital Estructurado I fund. The fund was allegedly structured to address the debts of businessman Antonio Jalaff, a former shareholder of Grupo Patio, and was linked to a wider investigation involving factoring company Factop.

In a separate matter, Chile’s Antitrust Court (TDLC) fined Larraín Vial approximately USD 1.6 million in April 2025 for interlocking directorates involving director Juan Hurtado Vicuña serving simultaneously on the boards of both Larraín Vial and competitor Consorcio Financiero, a practice prohibited since a 2016 legal amendment.

8) Recent Media

In late 2024 and 2025, Larraín Vial SpA and its asset management subsidiary faced significant media coverage related to regulatory actions and a subsequent criminal investigation. On October 21, 2024, Chile’s Financial Market Commission (CMF) publicly announced it had filed charges against Larraín Vial Activos S.A. Administradora General de Fondos (LVA AGF), its directors, and its general manager concerning the design, marketing, and valuation of the Capital Estructurado I investment fund. Media reports in November 2024 noted this fund was linked to a wider investigation involving factoring company Factop and was structured to address the debts of businessman Antonio Jalaff, a former shareholder of Grupo Patio. Following the CMF’s move, the Public Prosecutor’s Office announced in December 2024 that it would formalize charges against 13 individuals, including eight executives and directors from Larraín Vial, for alleged crimes including money laundering, fraud, and unfair administration.

In response to the criminal case, Larraín Vial announced in December 2024 that its AGF subsidiary had filed a criminal complaint for fraud against Álvaro and Antonio Jalaff, Daniel and Ariel Sauer, Cristián Menichetti, Luis Flores, and others who may be responsible for a scheme that allegedly deceived investors. Concurrently, the firm initiated a reparatory program for affected non-institutional investors of the fund’s Series B shares, which involved purchasing their shares. By late September 2025, the firm had paid out $3.327 billion pesos (approximately USD 3.3 million) under this compensation plan. The scandal precipitated major leadership changes: in December 2024, all five directors and the general manager of LVA AGF resigned to focus on their legal defense, though they remained in other roles within the broader firm. José Miguel Barros, a former executive, was brought back to chair the subsidiary, and Juan Pablo Flores was appointed its new general manager. Manuel Bulnes also resigned from his executive positions at the holding company, LarrainVial SpA, while remaining a partner.

The regulatory proceedings concluded in August 2025, when the CMF sanctioned LVA AGF with a fine of 60,000 UF (approx. USD 2.5 million) and its former general manager, Claudio Yáñez, with a 15,000 UF fine for inducing investors with deceptive information and breaching fiduciary duties. Following an appeal, in September 2025, the CMF reduced the fines to 50,000 UF for the firm and 12,000 UF for Yáñez, citing that the compensation program had exceeded the amount initially considered in the penalty calculation. The subsidiary’s financial results reflected the impact, with LarrainVial Activos reporting a loss of $69.3 million pesos for the nine months to September 2025, a reversal from a $2,870 million peso profit a year earlier, attributed to a 20% increase in administrative expenses including legal fees and indemnities related to the fund. In October 2025, media outlets reported on further leadership changes effective January 2026, with firm President Fernando Larraín stepping back from daily executive functions and Andrés Trivelli, then CEO of the brokerage, to become the new CEO of LarrainVial SpA.

In a separate regulatory matter, Chile’s Antitrust Court (TDLC) fined Larraín Vial approximately USD 1.6 million on April 16, 2025, in the country’s first ruling on interlocking directorates. The sanction was for the simultaneous participation of director Juan Hurtado Vicuña on the boards of both Larraín Vial and competitor Consorcio Financiero, a practice prohibited since a 2016 legal amendment.

The firm’s strategic activities also drew media attention. In June 2023, LarrainVial announced it would enter the US onshore market with a new third-party fund distribution business, LV Distribution, targeting US-based RIAs and family offices. By February 2024, LV Distribution had formed a strategic partnership with Crossmark Global Investments to offer its values-based investment products. In October 2023, Dutch asset manager Robeco expanded its 20-year partnership with LarrainVial, with the latter taking over its wholesale distribution for the US Offshore and Latin America markets. The firm’s M&A activity included the announced acquisition of Chilean pharmacy chain Farmacias Ahumada in June 2023 and the purchase of a 25% stake in Edinburgh-based investment manager Aubrey Capital Management in March 2024. In December 2024, it was reported that LarrainVial acted as the financial advisor to AES Andes on its sale of the Ventanas Power Plant.

On the ESG front, LarrainVial Asset Management hired Raimundo Alcalde as its Head of ESG in April 2023. The firm’s 2023 ESG report highlighted that it had become the first Chilean investor to join the Climate Action 100+ initiative and detailed a successful direct engagement with Brazilian company Oncoclinicas regarding a related-party loan. The firm received multiple awards in 2023 and 2024, including “Asset Management Company of the Year Latin America 2023” from Global Banking & Finance Awards and “Best Chilean high net worth advisory firm 2024” from Global Finance, The Banker, and Euromoney.

9) Strengths

Established Market Leadership and Track Record

Larraín Vial SpA’s 90-year operating history represents one of the firm’s most significant competitive advantages, demonstrating resilience through multiple economic cycles and market disruptions since 1934. The company has established dominant market positions across key metrics, ranking as the number one equity trading firm in Chile with a 22% market share and operating as the largest non-banking asset manager in the country. This market leadership extends regionally, with the firm achieving a 17% market share representing total trading volume on Chilean, Peruvian, and Colombian stock exchanges as of 2019, demonstrating sustained competitive positioning across the Andean region.

Superior Credit Rating and Risk Management Capabilities

LarrainVial Asset Management maintains an AMP-1 (Very Strong) rating from S&P Global Ratings, making it the only third-party fund manager in Chile to achieve this distinction and one of only five entities in Latin America with this rating. This rating assessment specifically highlighted the firm’s strong business profile, experienced management team, well-structured investment processes, and very strong risk management capabilities, including centralized risk control structures across all asset management units and comprehensive monitoring systems for credit, market, and liquidity risks. The firm’s risk management process utilizes adequate tools for risk assessment and maintains an independent compliance unit responsible for guaranteeing the integrity and transparency of asset management processes.

Comprehensive International Presence and Regulatory Compliance

The firm’s international expansion demonstrates strategic positioning across multiple jurisdictions, with operations in Chile, Peru, Colombia, Mexico, and the United States serving over 50,000 clients in 35 countries. LarrainVial Securities US LLC became the first Chilean financial company to register as a broker-dealer in the United States in 2010, maintaining SEC and FINRA registration status which requires ongoing demonstration of financial adequacy and operational capacity. This regulatory compliance across multiple jurisdictions provides competitive advantages through enhanced credibility, operational flexibility, and access to diverse client markets and investment opportunities.

Strong Strategic Partnerships and Distribution Networks

The firm has cultivated substantial strategic relationships that enhance its distribution capabilities and market reach, notably its 15+ year partnership with Invesco representing over USD 4.5 billion of client assets in Invesco products and raising nearly USD 2 billion since January 2023 through US-domiciled ETF distribution. Recent strategic acquisitions demonstrate the firm’s ability to expand internationally, including the March 2024 purchase of a 25% stake in Edinburgh-based Aubrey Capital Management and the partnership providing access to LarrainVial’s extensive Latin American investment experience while broadening distribution networks.

Proven Fund Management Excellence and Innovation

LarrainVial Asset Management ranks as the fifth largest manager in the Chilean local market with a 5.4% market share, maintaining strong performance across 34 mutual funds and 31 public investment funds, including three funds domiciled in SICAV Luxembourg and two funds domiciled in Cayman. The firm’s innovation capabilities are demonstrated through pioneering achievements, including being the first to advise an investment fund bond issue in Chile, launching simplified mobile applications, and establishing LV Distribution in the US market as an unprecedented step for a Chilean financial company.

Award-Winning Research and Investment Capabilities

The company’s research department, founded in 1992, has received recognition from Latin Finance, Institutional Investor, Consensus Economics, and Thomson Reuters for analytical quality and accuracy. The research team comprises 17 professionals providing fundamental analysis across Chile, Colombia, and Peru, covering sectors including Basic Materials, Industrials, Consumer Goods, Consumer Services, Telecommunications, Utilities, Financials, and Technology. This research excellence supports investment decisions across the firm’s operations and provides competitive advantages through superior market intelligence and analytical capabilities.

Diversified Revenue Streams and Financial Stability

The firm’s business model generates recurring revenues accounting for 58% of total earnings in 2024, validating strategic focus on fund management business which represents over 40% of total ordinary income. Revenue diversification across multiple business lines including capital markets, wealth management, asset management, and corporate finance provides stability and reduces dependence on any single revenue source. The company’s ability to maintain growth in assets under management to over USD 28 billion while distributing over USD 35 billion in assets demonstrates scale advantages and market confidence.

Experienced Management Team and Partnership Structure

The firm operates through a proven partnership model where senior executives and partners participate in ownership while maintaining professional management of daily operations, creating alignment between leadership and long-term value creation. The management team includes professionals with extensive experience in financial asset management markets, providing proven track records in business development and strategic execution. This partnership structure has enabled the firm to attract and retain top talent while maintaining strategic continuity across multiple market cycles and expansion phases.

10) Potential Risk Areas for Further Diligence

Current Regulatory Enforcement and Criminal Investigation Risk

The most immediate risk facing Larraín Vial SpA centers on the ongoing criminal investigation involving eight executives and directors from the company related to the Capital Estructurado I fund scandal. The Chilean Public Prosecutor’s Office announced in December 2024 that it would formalize charges against 13 individuals for alleged crimes including money laundering, fraud, and unfair administration, with eight of these individuals being LarrainVial executives. This criminal exposure represents material reputational and operational risk, particularly given that the firm’s asset management subsidiary LarrainVial Activos reported a loss of $69.3 million pesos for nine months to September 2025, reversing from a $2,870 million peso profit the previous year, attributed to increased legal fees and indemnities related to the fund.

Fund Management Governance and Fiduciary Duty Risk

The Chilean Financial Market Commission sanctioned LarrainVial Activos S.A. Administradora General de Fondos with a 60,000 UF fine (approximately USD 2.5 million) for inducing investors with deceptive information and breaching fiduciary duties while managing the Capital Estructurado I fund. The regulatory findings indicate systemic weaknesses in the firm’s fund management oversight, including overvaluing fund assets by treating deteriorated debt securities as equity participation and acquiring impaired loans without discounts despite the debtor’s compromised financial situation. These governance failures in a business segment representing over 40% of total ordinary income highlight significant operational control deficiencies and potential exposure to additional regulatory scrutiny across the firm’s fund management operations.

Leadership Transition and Management Continuity Risk

Major leadership changes precipitated by the regulatory crisis create succession planning and operational continuity risks, with all five directors and the general manager of LarrainVial Activos resigning in December 2024 to focus on legal defense. Additional executive departures include Manuel Bulnes stepping down from executive positions at the holding company while remaining a partner, and the announced transition of firm President Fernando Larraín stepping back from daily executive functions effective January 2026. The simultaneous departure of multiple senior leaders across different business units during an active criminal investigation raises concerns about institutional knowledge retention, client relationship management, and strategic execution capabilities during a critical period.

Regulatory Compliance and Enforcement Vulnerability

The firm faces heightened regulatory scrutiny across multiple jurisdictions, with recent enforcement actions demonstrating compliance vulnerabilities in key business areas. Chile’s Antitrust Court fined Larraín Vial approximately USD 1.6 million in April 2025 for interlocking directorates involving director Juan Hurtado Vicuña serving on boards of both Larraín Vial and competitor Consorcio Financiero. Historical regulatory issues include S&P placing the firm’s credit ratings on CreditWatch negative in 2014 related to Chilean securities regulator charges for participation in market manipulation schemes, resulting in over $25 million in initial fines before court reversal in 2015. These recurring regulatory challenges suggest potential systemic compliance issues requiring comprehensive risk management system evaluation.

Reputational and Client Confidence Risk

Media coverage of the criminal investigation and regulatory sanctions poses significant reputational risk to client relationships and business development activities, particularly given the firm’s positioning as a trusted financial advisor managing over USD 28 billion in client assets. The Capital Estructurado I fund scandal involved allegations that executives provided misleading information to investors about fund characteristics, with presentations using the Grupo Patio logo despite the fund investing in deteriorated loans rather than equity stakes. This reputational damage could impact client acquisition and retention across wealth management and institutional client segments, potentially affecting revenue stability and market position in competitive Latin American financial services markets.

Operational and Technology Infrastructure Risk

As a traditional financial services firm operating across five countries with over 850 employees, Larraín Vial faces standard operational risks including cybersecurity threats, technology system failures, and business continuity challenges. The firm’s expansion into digital services and alternative assets requires ongoing technology infrastructure investments to maintain competitive positioning while ensuring adequate security controls and regulatory compliance across multiple jurisdictions. Cross-border operations in Chile, Peru, Colombia, Mexico, and the United States create additional complexity for operational risk management, requiring coordination of compliance standards and technology systems across different regulatory environments.

Market Concentration and Economic Sensitivity Risk

The firm’s revenue concentration in Latin American markets exposes it to regional economic volatility, political instability, and regulatory changes that could impact business performance. Market position as the number one equity trading firm in Chile with 22% market share creates dependence on Chilean capital market activity and regulatory environment. Additionally, the firm’s exposure to commodity-dependent economies through client base and investment strategies subjects it to cyclical risk from commodity price volatility affecting regional economic performance and client investment capacity.

Standard Emerging Market Investment Management Considerations

Operating in emerging markets presents inherent risks including currency volatility, political instability, and evolving regulatory frameworks that could impact business operations and client investments. The firm’s Latin American focus requires ongoing monitoring of sovereign risk, capital controls, and regulatory changes across multiple jurisdictions that could affect cross-border investment flows and business development activities.

Broader Industry Regulatory Evolution Risk

The financial services industry faces ongoing regulatory changes related to ESG requirements, digital asset regulation, and enhanced compliance standards that could require significant operational adjustments and compliance investments. Changes to pension fund regulations in key markets like Chile could impact the firm’s distribution relationships and asset management business growth prospects, requiring strategic adaptation to evolving market structures and regulatory requirements.

Sources

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