News Column

Hispanics on Wall Street

October 2001

By Vivienne Heines, HISPANIC BUSINESS® magazine

The New America Alliance convenes a summit to link Hispanics and the financial services industry.

Bridging the chasm between Wall Street and the nation's Hispanic community is the focus of an economic summit that will take place October 9 through 11 in New York City.

Organizers hope the Wall Street Summit will introduce financial leaders to the growing Hispanic market. Topics to be discussed range from the participation of Hispanic companies in globalization and portfolio growth strategies to Hispanic representation on corporate boards.

The summit's goal is to establish dialogue with Wall Street leaders, says Jorge Castro, chairman of economic capital for the Virginia-based New America Alliance, which is sponsoring the event. Mr. Castro is a principal of CIC Asset Management Inc. in Los Angeles.

Summit invitees include John A. Thain, president and co-chief operating officer of Goldman Sachs; Sen. Jon Corzine (D-NJ); Federico Peña, managing director of Vestar Capital Partners; Mario Baeza, chairman and CEO of TCW/Latin America Partners; Robert S. Rollo, managing partner of Rollo/TMP Worldwide; Richard M. Ferry, president of Korn/Ferry International; and Treasury Secretary Paul H. O'Neill.                                                                                                               Jorge Castro

Mr. Castro lists three primary areas of concern: improving access to capital, increasing the number of Hispanics on major corporate boards, and creating a pipeline to train young Hispanics for financial jobs. Those issues have been identified as factors limiting the involvement of Hispanics in the nation's financial power structure, according to Mr. Castro.

"This summit has more of a discussion component to it," he says. "We want to validate our thoughts on these issues and to have an honest dialogue with people from Wall Street. We want to talk to them in a collaborative manner to come up with ways to work together to address these problems."

Founded in 1999, the New America Alliance is dedicated to promoting the well-being of the U.S. Hispanic community, with an emphasis on education, economic and political empowerment, strategic philanthropy, and public-policy advocacy. The organization has 60 members.

To join, members must be successful entrepreneurs, senior executives of Fortune 1000 companies, or board members of major national corporations. Membership costs $10,000 per person.

High-profile members include Henry Cisneros, chairman of American CityVista; Moctesuma Esparza, executive producer of Esparza & Katz Productions; Carlos Alcantara, president of Pennzoil-Quaker State; Andy Unanue, chief operating officer of Goya Foods; and Raul Yzaguirre, president of the National Council of La Raza.

Despite members' financial status, many could probably use investment advice, says Mr. Castro.

"We'll probably have 50 to 100 of the most successful Latinos in the country [at the summit]. But still, their financial management skills may not be all they should be," he says. He cited a recent study that found people continue to overinvest in real estate because it's tangible and easy to understand.

"There's a tremendous lack of understanding among the Latino community about finances," Mr. Castro says. "Most Latino families are underinvested in the financial market."

Likewise, many Wall Street firms are unfamiliar with the nation's rapidly expanding Hispanic entrepreneurial community and the challenges it faces.

"We're pioneers in the effort to bring these issues to the attention of the people on Wall Street," says Frank Sanchez, chairman of the Wall Street Summit and chairman of the Sanchez Family Corp. in Los Angeles. "We can provide the Wall Street leadership with information to open up new opportunities in the Hispanic market."

The educational aspect of the summit will go both ways, officials point out. By educating Hispanics and encouraging them to enter the financial sector, Alliance members hope to foster the placement of Hispanics in Wall Street jobs.

Currently, Hispanics account for just 1 or 2 percent of those employed in the financial services sector, says Mr. Castro.

"We have had meetings with Wall Street leaders. They acknowledge they haven't done a good job, and that they need our help in reaching more young Hispanics," he says.

"Clearly it begins with education. If you look at the number of Latinos attending business school, it is not encouraging. And among those, the number who are going into financial services is even lower."

Alliance officials say they would like to see more Hispanics on the boards of Fortune 1000 corporations.

Bridging the gap between Wall Street and the Hispanic community has benefits for both sides, officials say. For example, Hispanics often cite a lack of access to capital as an obstacle to economic growth.

"The reality is that people do business with people they know and people they already have relationships with," says Mr. Castro. "Those networks aren't in place in the Latino community. They don't know people on Wall Street."

The financial services industry plays a key role in the allocation of capital and creation of new businesses – and Hispanics must be more involved, he says.

"Jobs are created by private enterprise. Private enterprise is created by capital. Capital comes from Wall Street. We need to be part of that process."

Source: HISPANIC BUSINESS magazine

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