Scotiabank is to acquire a 51 per cent stake in Colfondos AFP, Colombia's fourth largest pension fund company, pending regulatory approval.

The terms of the transaction are not financially material and were not disclosed. After completion of the transaction, Mercantil Colpatria will retain 49 per cent ownership in the firm.

"Expanding Global Wealth Management's footprint in Latin America is a strategic priority for Scotiabank and the acquisition of a majority stake in Colfondos will increase our regional presence in this segment," says Chris Hodgson (pictured), group head of global wealth management at Scotiabank. "Colfondos has achieved a great deal of success and, with our partners at Mercantil Colpatria, we look to continue the growth and expansion of this business."

Scotiabank also operates pension fund company Profuturo AFP in Peru, which it acquired in 2008, and Scotia Crecer AFP in the Dominican Republic, which it acquired in 2007.

Colfondos, with USD9.25bn in assets under management, has grown its presence to 27 offices in 20 cities across Colombia and 1,200 employees since it was founded in 1991. In 2009, Mercantil Colpatria acquired a majority stake in Colfondos. Anchor Fund and Linzor Capital Partners currently hold minority stakes in Colfondos and have agreed to sell these stakes to Scotiabank as part of the transaction.

"We are very pleased to work with Scotiabank, with their proven experience and success in wealth management," says Alcides Vargas Manotas, president of Colfondos AFP. "We are certain that Scotiabank's global capabilities will contribute to Colfondos' current investment portfolios resulting in innovative and value added alternatives for our clients."

In January 2012, Scotiabank formed a strategic partnership with Mercantil Colpatria and acquired 51 per cent of Banco Colpatria.