GenTrust, a registered investment advisory with offices in New York and Miami, had plans to set up a Puerto Rico office in late 2017, but Hurricane Maria—and its aftereffects—delayed the move, until now. The firm opened up its new San Juan, Puerto Rico, location this month. The new office will be located in the El Caribe building and lead by Principal Elena Hernandez.
“We believe the economy of Puerto Rico has an encouraging future and we feel the time is right,” said Hernandez, in a prepared statement.
The firm has had an active presence in Puerto Rico for over a decade; Hernandez, who has worked out of the New York and Miami offices for more than two years, would fly out to the island with Founding Principal George Perez quite often to meet with clients. Out of its $2.4 billion in total assets under management, around 15%, or $360 million, come from Puerto Rico.
Hernandez said GenTrust held numerous meetings about its expansion in the weeks leading up to Hurricane Maria, and it was finally able to finish what it started in October. In the interim, GenTrust focused its business on raising money for on-the-ground relief efforts and doing what they could to assist clients.
“It wasn’t the right time to push a business when there were emergency situations involved,” she said.
Along with learning how to support the local community, the firm learned to pay attention to the level of exposure Puerto Rican investors have to their state. Many Puerto Rican investors were overexposed to its market and suffered losses after Maria. Hernandez is prepared to balance overexposed portfolios by decreasing their exposure. But she also wants to balance portfolios with what she considers less exposure to the local equity market by adding more local asset classes.
Puerto Rico’s economy looks promising to GenTrust because of the billions of assets in the market, and the local advice industry will eventually move toward a fiduciary standard, said Hernandez. The corporate tax rate has been a low 4% since 2012, while much of the Western world is trying to tax the wealthy, so mainland millionaires are attracted to the island.
GenTrust serves high-net-worth individuals, family offices, small businesses and institutional investors. GenTrust is looking to recruit advisors from some of the large broker/dealers in the area, including UBS, Merrill Lynch, Santander and Popular Securities. Hernandez said GenTrust is already in talks with local advisors who have their same fiduciary mentality.