FTI Consulting eyes growth in Latin American consultancy market

FTI Consulting is aiming to benefit from strong growth opportunities in Latin America, particularly in the forensic and private equity dealmaking segments.

With over 5,700 consultants and professionals globally, FTI Consulting is one of the world’s largest management consulting firms. The firm supports its clients in a variety of areas including strategy, finance, business transformation, mergers & acquisitions, restructuring, antitrust, communications, disputes and forensics.

Michael Cullen was brought on board the firm’s Bogotá office last month. Speaking to BNamericas, Cullen revealed that his appointment as well as other investments that FTI Consulting is making in Latin America are indicative of a broader drive for growth in the region.

In particular, he anticipates growth for FTI Consulting’s Forensic & Litigation arm, which offers services such as risk & investigations, anti-corruption investigations & compliance, anti-money laundering, compliance monitoring and dispute advisory, among a broad range of others.

Cullen explained how the vast pools of emergency funds currently being deployed across the region to mitigate the Covid-19 crisis leave significant room for corruption. “We feel that in the medical space there’s going to be some significant corruption investigations that we hope to assist on, working with large international and Latin American law firms to uncover those.”

Aside from the direct incidence of corruption driven by emergency funding, there is the broader risk of corruption driven by widespread economic hardship. Cullen explains that financial strain will not only increase the corruption risk, but it will also expose corruption that has been ongoing under cover of steady economic conditions. He points to the Bernie Madoff scandal that FTI Consulting had a large role in exposing, stressing that it was the global financial crisis that paved the way for its exposure. 

Meanwhile, Cullen also anticipates growth in the demand for dispute advisory services. “We think there will be a sharp increase in international arbitration around everything from large infrastructure projects, all the way through to disputes about damages in large business deals that have fallen apart, whether that be airline related or travel agency related, any of the industries that are going to be adversely affected by the economic conditions,” he explained.

The third opportunity area identified by FTI Consulting is in the private equity space. Cullen revealed that a number of private equity players in key markets such as the US, Europe and Asia are on the lookout for distressed assets in Latin America, and will be looking for support to enter the market.

The investment in distressed assets will, of course, always be accompanied by the risk factor that the Covid-19 crisis and the resultant poor economic conditions will persist. But there are other private equity opportunities in the region as well. The response to the crisis in the medium to long term will most likely be a strengthening of assets. As a result, Latin America has a number of infrastructure, energy, mining and connectivity projects underway that will likely appeal to global private equity players.

The high level of risk in Latin America has previously been a barrier for global investors in the region. FTI Consulting is looking to position itself to help the inflow of international funds in a risk-free setting, while also supporting investigations and disputes in the domestic market. According to Cullen, the firm’s multidisciplinary approach to problem solving, and the focus on Latin America that runs through all rungs of the firm’s global operations will make it a strong presence in the region.

“Our belief and focus in Latin America at FTI goes right the way across the organization, all the way from our global CEO to the regional investigative, corporate finance, construction, economic, political and strategic communication experts here on the ground in Colombia, Mexico, Brazil, Argentina, et cetera,” he said.