Fitch Ratings Affirms Sura Fiduciary as Excellent(col)

Fitch Ratings has affirmed the national investment management quality rating of Fiduciaria Sura S.A. (Fidusura) at ‘Excellent(col)’, with a stable outlook. This rating pertains to Fidusura’s management of collective investment funds (FIC) and individual investment trusts in Colombia, focusing on traditional assets and economic content.

Key Rating Factors

The ‘Excellent(col)’ rating reflects Fidusura’s competitive, operational, and managerial strengths as part of the Sura Investments platform. This affiliation provides an investment process bolstered by comprehensive research across available assets. The rating also considers the extensive experience and balanced profiles of key personnel in risk and investment areas, alongside a robust control and governance structure that reinforces fiduciary responsibility. Additionally, the rating benefits from the group’s financial support.

Fitch identifies ongoing challenges, including the consolidation of the organizational structure to meet business needs, formalizing performance attribution exercises for traditional asset FICs within committees, enhancing documentation of role characterizations and instructions, and increasing automation in traditional asset workflows, particularly in registration, completion, and compliance processes.

The ‘Excellent(col)’ rating is based on the following category scores:

• Investment Process: ‘Excellent’
• Investment Resources: ‘Excellent’
• Risk Management: ‘Excellent’
• Company and Client Service: ‘Strong’
• Investment Performance: ‘Consistent’

Investment Process

Fidusura’s investment process is integrated into the Sura Investments platform, benefiting from detailed research and quantitative modeling that incorporates reference portfolios to guide investment decisions for certain traditional asset portfolios. The process follows a clear investment philosophy, grounded in internal tools and analysis. Challenges include communicating portfolio performance metrics in formal settings and defining minimum investment limits for alternative asset portfolios.

Investment Resources

Fidusura’s teams are part of Sura Investments’ regional structure and staffed with notable professionals. The fiduciary’s structure is undergoing consolidation, with role changes in the traditional asset investment area. Opportunities for improvement include segregating strategy and execution functions for these portfolios and increasing automation in traditional asset workflows. Alternative funds benefit from the Finansoft platform, enabling effective operations, flexibility, and scalability. Sura Investments provides strong technological support.

Risk Management

Fitch observes a robust control and governance structure within Grupo Sura‘s policies, strengthening the risk control framework. The process maintains independence from asset management functions, ensuring strong influence and balance in front-office activities. Fidusura demonstrates solid management of financial and non-financial risks, notably in credit and counterparty risk management, and has made improvements in operational risk management. The fiduciary has a comprehensive compliance framework with clearly documented policies on conflict of interest management, personal investments, and fair allocation of operations.

Company and Client Service

The fiduciary benefits from deep synergies with Sura Investments across all asset management areas and evident financial backing. These competitive advantages have facilitated business expansion and significant growth in assets under management. Fidusura aligns closely with investor interests by incorporating portfolio performance into variable compensation determinations. The fiduciary maintains a strong client service infrastructure and is working on offering transactional options.

Investment Performance

Overall, strategy performance is considered consistent and in line with peer funds.

Rating Sensitivities

Factors that could lead to a negative rating action include:

• Personnel changes affect turnover and retention metrics.
• Adverse significant changes in any of the five key rating pillars.

Factors that could lead to a positive rating action:

• Fidusura’s rating is at the highest level. However, factors that could provide greater stability include those mentioned in the key rating factors.

This rating was solicited and assigned or maintained at the request of the fund operator or a related third party. Fitch Ratings’ credit rating constitutes a professional opinion and does not constitute a recommendation to buy, sell, or hold any security, nor does it guarantee fulfillment of the rated entity’s obligations.

Photo credit: Grupo Sura.