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World Leaders Call for Action on AI and Regional Reforms

The 2025 Annual Meeting of the World Economic Forum took place this week, with world leaders emphasizing regional reforms and the application of artificial intelligence. The event was not immune to the words and actions of Donald Trump. In fact, several sessions included discussions and reflections on the potential economic effects of the new U.S. administration.

For example, during Tuesday’s session, European Commission President Ursula von der Leyen responded to growing threats of tariff policies and anti-climate measures from the U.S. president. According to Banca March analysts, Von der Leyen reaffirmed the European Union’s commitment to remaining an open bloc willing to cooperate with international partners, advocating for an open approach in contrast to U.S. protectionism.

“She described the bloc’s strategy, which will be based on negotiation, while also stressing the importance of defending the EU’s principles, interests, and values,” they noted.

Banca March also highlighted that several international financial executives spoke during the sessions, pointing out a competitive advantage for U.S. banks due to their more lenient regulations. The CEO of Italian bank UniCredit stated that American banks are the real competitors. JP Morgan noted that Trump has created a very pro-business environment. The Vice President of BlackRock argued that Europe needs a wake-up call on regulation. In contrast, the CEO of UBS took the opposite stance, opposing widespread deregulation for large banks.

Regarding other industries, the CEO of pharmaceutical company Novartis downplayed concerns about Trump’s stance on vaccines and other health policies, calling such worries “exaggerated.”

Environmental Commitments

One of the most significant announcements was the creation of the world’s largest tropical forest reserve, the Kivu-to-Kinshasa Green Corridor Reserve, which will protect over 550,000 square kilometers of forest across the Congo River Basin.

“This historic and unprecedented initiative will not only transform our natural landscapes but also improve the livelihoods of millions of our citizens,” said Democratic Republic of Congo (DRC) President Félix-Antoine Tshisekedi Tshilombo. He added that the project goes beyond environmental preservation, incorporating economic development as well.

Meanwhile, Malaysian Prime Minister Anwar Ibrahim expressed optimism about ASEAN’s future and Malaysia’s role in it.

“The spirit of collaboration and solidarity among ASEAN leaders is unique,” he said, highlighting the regional integration in green energy that has contributed to Malaysia’s rise as a high-tech manufacturing hub.

He emphasized that while the U.S. remains Malaysia’s largest individual investor, its economic ties with China are expanding.

“We don’t go to war or make threats; we discuss, we get a little angry, but we focus on economic fundamentals and move forward,” Anwar stated.

AI and Technology

UN Secretary-General António Guterres issued a strong warning about two growing global threats: the unchecked expansion of artificial intelligence and the climate crisis. He described these issues as unprecedented risks for humanity, requiring immediate and unified action from governments and the private sector.

On AI, Guterres acknowledged its immense potential but cautioned against leaving it unregulated. He emphasized the need for international collaboration, referencing the UN’s Global Digital Compact as a framework for responsible digital technology use.

“We must work together to ensure that all countries and people benefit from AI’s promise and potential to support social and economic progress,” he said.

He also urged the private sector not to backtrack on climate commitments and called on governments to deliver on their promise to introduce new, economy-wide national climate action plans this year.

Meanwhile, Spanish Prime Minister Pedro Sánchez called for a reform of social media governance across the EU to combat disinformation and cyberbullying.

He urged for stronger enforcement of the Digital Services Act and the expansion of the European Centre for Algorithmic Transparency’s powers.

“The values of the European Union are not for sale,” he emphasized, calling for increased funding to research social media algorithms and ensure that Europe’s brightest minds address this critical challenge.

Geopolitics and International Relations

The Davos meeting coincided with the implementation of the ceasefire between Israel and Hamas.

Palestinian Authority Foreign Minister Varsen Aghabekian expressed cautious optimism, stating:

“Optimism is not an option; it is a necessity.”

She added that she hopes the ceasefire will lead to a more sustainable peace. Addressing the humanitarian crisis in Gaza, she stressed the need for immediate aid and long-term planning.

“We must ensure that aid reaches the people,” she insisted.

Meanwhile, weeks after the sudden collapse of Bashar al-Assad’s regime, Syrian Foreign Minister Asaad Hasan AlShaibani outlined the new government’s plans.

“We will not look to the past. We will look to the future. And we promise our people that this misery will not happen again,” he declared.

He pledged to respect women’s rights, reject sectarian divisions, and called for the removal of remaining sanctions.

“Thousands are returning to Syria and need to help rebuild the country. We are turning a new page… Syria must be a nation of peace.”

In a discussion with CNN’s Fareed Zakaria, Iranian Vice President for Strategic Affairs Javad Zarif expressed hope that a second Trump presidency would reconsider its withdrawal from the Joint Comprehensive Plan of Action (JCPOA), also known as the Iran nuclear deal, which Trump abandoned in 2018.

He suggested that a new Trump administration might take a more serious, focused, and realistic approach regarding the cost of withdrawing from the agreement.

“In terms of deterring Iran, [the withdrawal from the JCPOA] has failed. It has imposed significant economic costs on the Iranian people. Of course, the Iranian government is suffering, but the Iranian people—especially the most vulnerable—are suffering the most,” Zarif stated.

Private Equity Deals in the Healthcare Sector Reached $115 Billion in 2024

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This surge was driven by an increase in the number of large-scale transactions. In total, five deals exceeded $5 billion, compared to two in 2023 and one in 2022. North America remains the largest market, accounting for 65% of global deal value, while Europe and Asia-Pacific represent 22% and 12%, respectively. Deal volumes remained stable relative to historical levels, with a wave of activity in North America and Europe offsetting a 49% decline in deal volume in Asia-Pacific since 2023. These are some of the key findings from Bain & Company’s Global Healthcare Private Equity Report 2025.

For Cira Cuberes, partner at Bain & Company, the private equity market in the healthcare sector made a strong comeback last year, largely due to an influx of large-scale transactions, particularly in the biopharmaceutical space. “We also observed a resurgence of deals in the health technology sector. Looking ahead to 2025, we expect LPs to continue backing mid-market fund managers due to their strong returns and sector expertise. The smartest strategy for investors will be to focus on opportunities arising from spin-offs and incorporate value creation principles into their due diligence,” she commented.

In Europe, deal volume surpassed the peak reached in 2021, driven by a concentration of smaller deals in the first half of the year. The biopharmaceutical and medical technology sectors were two of the key drivers in 2024, as companies acquiring assets in these industries can easily expand them across the regions in which they operate. Bain remains optimistic about the European market, citing strong acquisition volume growth and a stabilizing macroeconomic environment. The firm anticipates continued momentum in deal activity and sees potential for more mega-deals.

The biopharmaceutical sector continues to lead healthcare deals in terms of total value, thanks to several major transactions in 2024. Despite the record deal value in biopharmaceutical buyouts, global deal volume in the biopharmaceutical tools and life sciences sectors declined by 5% and 10%, respectively, since 2020 in terms of compound annual growth rate (CAGR). Several factors contribute to this trend, including the struggle between buyers and sellers to align sale prices and a reduction in pharmaceutical services spending following a sharp decline in U.S. biopharmaceutical private equity funding.

Healthcare IT Dealmaking Rebounded in 2024

Several factors contributed to the resurgence in healthcare IT deals. First, providers—facing financial pressures and changes in reimbursement models—are investing in core systems to boost efficiency. In response, private equity firms are increasingly investing in assets that support workflow improvements. Additionally, payers—seeking to enhance payment integrity—are investing in advanced analytics. At the same time, biopharmaceutical companies are modernizing clinical trial IT infrastructure to accelerate and improve drug development in an environment of tighter funding and stricter regulatory requirements.

Four Trends Reshaping the Healthcare Private Equity Landscape

Mid-market funds continue to innovate: Historically, healthcare-focused mid-market funds have outperformed the broader market, benefiting from ongoing innovation and evolving investment strategies. They have also managed to sustain both asset acquisition and exits since 2020, even as the broader healthcare buyout market struggled. This strong performance has led to robust fundraising. Since 2022, mid-market funds with healthcare exposure have raised approximately $59 billion, exceeding fundraising levels from the previous three years by about 40%. While they have traditionally focused more on provider assets, mid-market private equity firms have expanded their scope to include healthcare IT and provider services while maintaining a strong presence in biopharma and medical technology.

Spin-offs unlock value in a competitive market: Despite year-to-year variability in deal activity, healthcare spin-offs have followed an upward trajectory since 2010, driven by a combination of public companies aiming to enhance shareholder value and private equity firms eager to acquire high-value assets. Successful spin-offs allow public companies to improve margins, focus on revenue growth, and reduce leverage and complexity. They also create opportunities for private equity firms to acquire overlooked assets with significant value-creation potential under new ownership. Given the reduced level of sponsor-to-sponsor deals since the 2022 peak, the combination of spin-offs and corporate deals has attracted a diverse range of investors looking to deploy capital into scalable healthcare assets with strong value-creation potential.

Maximizing exit value is a strategic imperative: Private equity exit deal volume in healthcare remained low in 2024—41% below its 2021 peak—as high interest rates and valuation mismatches between buyers and sellers extended holding periods and limited funds’ ability to return capital to their LPs. Historically, multiple expansion has driven nearly half of total deal returns, but this lever is unlikely to sustain returns to the same extent in the coming years. To execute a successful exit strategy, sellers must take an objective view of asset performance and trajectory while having a plan for future value creation. Buyers who integrate value-creation principles into their pre-acquisition diligence gain a competitive advantage.

Asia-Pacific investment has evolved: Private equity firms are expanding their investments beyond China in the Asia-Pacific region, where deal value has grown at an approximate 21% CAGR since 2016. However, deal volume in the region has declined significantly since 2023 due to a slowdown in Chinese transactions, a shift in deal volume to India, Japan, and South Korea, and increased competition from strategic players eager to pursue M&A. India, in particular, is emerging as a compelling alternative to China for dealmaking, given its expanding middle class—driving healthcare demand—and strong economic growth. Japan and South Korea are also seeing accelerated deal volume, fueled by favorable macroeconomic factors and an aging population with increasing healthcare needs.

“We are optimistic about the outlook for private equity in the healthcare sector in 2025, especially as deal multiples begin to stabilize, enabling better alignment between supply and demand, and as a growing base of tradable assets presents new opportunities. Lower interest rates in the U.S. and stable economic growth in regions like Japan and India indicate favorable investment conditions. Looking ahead, the accumulation of assets in private equity portfolios, along with increasing LP pressure for liquidity, suggests an imminent rise in sponsor exits,” concludes Cira Cuberes, partner at Bain & Company.

UNTITLED Has a New Partner: Enrica Casagrande

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The law firm of Martín Litwak, UNTITLED, welcomed a new partner this January: Enrica Casagrande, who has been part of the firm’s team since its early days.

“Enrica was one of the first to join our firm in 2014, when we were a small team in Montevideo. Her strategic vision, leadership, and commitment were key to her growth alongside us. Since then, she has progressed from Managing Associate to Director of Trustees, and now, to Partner,” the firm announced in a statement.

Casagrande is a lawyer specialized in wealth structuring, international taxation, and fiduciary services. She holds a doctorate in law and social sciences from the University of the Republic of Uruguay.

Argentina’s VALO Absorbs Columbus and Strengthens its Financial Services Offering

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A recent CNV resolution authorized the merger of two players in the Argentine financial world: VALO, a firm specialized in investment fund custody and financial trusts, absorbs Columbus, a company with extensive experience in investment banking and capital markets.

“VALO has 24% of the investment fund custody business, is the leading trustee in the sector, and as a result of the merger, it is also a leader in the investment banking segment, both in mergers and acquisitions operations and in valuations and restructurings,” they announced in a statement.

Additionally, the firm is positioning itself in corporate banking with a service line designed to provide comprehensive support to companies seeking to enhance their growth.

“This strategic union not only expands the reach of our services but also strengthens and consolidates VALO as a key player in a constantly evolving financial system. We are going to take on a leading role in what’s to come in the market: in structuring debt issuances for both the private and public sectors, as well as in equity and stock placements. We have the people, the experience, and the clients to fill that role,” said Juan Nápoli, president of VALO.

The entities, which are already operating as a united and integrated company, offer comprehensive financial services for corporate and institutional clients. Current clients of both entities will now have access to a broader and more specialized portfolio of services, while new interested parties will find a fresh value proposition.

“The synergy we have achieved is revolutionary for the sector. With this merger, VALO becomes the most professional 100% corporate bank with the most comprehensive product offering in the Argentine market. Together, we can innovate faster, provide excellent service, and offer the most suitable business solutions for our clients. This merger not only strengthens our market position but also allows us to offer more efficient services with a highly specialized team in complex transactions,” explained Norberto Mathys, vice president and CEO of VALO, and Koni Strazzolini, former Columbus partner and newly appointed board member of VALO.

VALO (Banco de Valores S.A.) was founded in 1978 by the Mercado de Valores (MERVAL) and operates as a financial trustee and custodian of mutual funds. Following the merger by absorption of Columbus, it is now the only wholesale bank in the country offering a comprehensive proposal for corporate and institutional clients. Additionally, since 2020, VALO has been pursuing a solid growth strategy at the regional and global levels and currently has a presence in Uruguay, the United States, and Paraguay.

One in Five Pension Funds Lacks Liquidity in Adverse Scenarios

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Over the past decade, pension funds have increased their investments in private assets to enhance returns through the illiquidity premium. However, they are now reconsidering the potential liquidity risks associated with this strategy. According to a new global survey conducted by Ortec Finance, a specialist provider of risk and return management solutions for pension funds, nearly 18% of pension funds report not having enough liquidity to withstand adverse scenarios.

The study, conducted in the United Kingdom, the United States, the Netherlands, Canada, and the Nordic countries, surveyed senior executives from pension funds managing a total of $1.451 trillion in assets. It found that, in addition to the 18% reporting insufficient liquidity, another 62% believe they have enough liquidity for most scenarios but acknowledge that extreme situations could pose challenges. In contrast, only 20% say they have no liquidity concerns.

Fund managers identify both short- and long-term risks, with long-term liquidity risk being the primary concern among respondents. About 60% cite this as the main risk facing the funds they manage, while 25% consider short-term liquidity risk to be the most significant. Only 15% believe that short- and long-term risks are roughly equal.

The increase in exposure to private assets is part of the reason behind liquidity concerns, particularly among defined benefit (DB) pension schemes. Among the managers surveyed, 80% reported that unfunded commitment risk represents either a significant or moderate threat to the DB pension industry over the next three years. Overall, 25% of managers believe that unfunded commitments beyond the control of pension portfolio managers pose a significant risk, while 19% do not consider it a risk.

Despite these liquidity concerns, 58% of respondents state that liquidity is already well managed, and 28% believe other risks are more pressing. Meanwhile, 10% consider liquidity risk a priority, while 4% say it is not a major concern.

“Our study highlights the liquidity challenges facing pension funds, particularly given the unpredictability of projecting unfunded commitments and capital calls. To address this issue comprehens

Pension Funds Increase Private Asset Exposure but Face Growing Liquidity Concerns

The study, conducted in the United Kingdom, the United States, the Netherlands, Canada, and the Nordic countries, surveyed senior executives from pension funds managing a total of $1.451 trillion in assets. It found that, in addition to the 18% reporting insufficient liquidity, another 62% believe they have enough liquidity for most scenarios but acknowledge that extreme situations could pose challenges. In contrast, only 20% say they have no liquidity concerns.

The increase in exposure to private assets is part of the reason behind liquidity concerns, particularly among defined benefit (DB) pension schemes. Among the managers surveyed, 80% reported that unfunded commitment risk represents either a significant or moderate threat to the DB pension industry over the next three years. Overall, 25% of managers believe that unfunded commitments beyond the control of pension portfolio managers pose a significant risk, while 19% do not consider it a risk.

“Our study highlights the liquidity challenges facing pension funds, particularly given the unpredictability of projecting unfunded commitments and capital calls. To address this issue comprehensively, funds should focus on scenario modeling and stress testing. Modeling capital calls and private asset distributions can help funds understand their potential liquidity constraints in worst-case scenarios over the next five, ten, or twenty years,” says Marnix Engels, Managing Director of Global Pension Risk at Ortec Finance.

Thornburg Launches Its First Active ETFs

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Thornburg Investment Management, a global investment firm, has announced the launch of its first two exchange-traded funds (ETFs): Thornburg International Equity ETF (Nasdaq: TXUE) and Thornburg International Growth ETF (Nasdaq: TXUG).

“We are very excited to enter the ETF market and provide clients with an additional way to access our investment solutions,” said Mark Zinkula, CEO of Thornburg. “Each of these new ETFs reflects our long-term commitment to meeting client demand for solutions with an active, fundamental investment process and a high-conviction approach.”

Thornburg International Equity ETF is managed by Lei Wang, CFA, and Matt Burdett, while Thornburg International Growth ETF is overseen by Sean Sun, CFA, and Nicholas Anderson, CFA. Thornburg International Equity ETF seeks long-term capital appreciation, whereas Thornburg International Growth ETF focuses on long-term capital growth. Both funds primarily invest in equities from non-U.S. developed markets.

For over 42 years, Thornburg has been a recognized leader in equity, fixed income, and multi-asset investing. In the coming months, the firm plans to launch two fixed-income ETFs: Thornburg Core Plus Bond ETF (Nasdaq: TPLS) and Thornburg Multi-Sector Bond ETF (Nasdaq: TMB).

“Thornburg’s ETF strategies offer investors flexible, transparent, and efficient opportunities to build and diversify their portfolios,” said Jesse Brownell, Global Head of Distribution. “Building Thornburg’s ETF platform represents significant human and capital investments to ensure that our infrastructure is scalable and successful for our clients,” he concluded.

Thornburg Investment Management manages $45 billion in assets, including $44 billion in managed assets and $1 billion in advised assets as of December 31, 2024.

U.S. RIAs Reached Record-High Mergers and Acquisitions in 2024

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The U.S. Registered Investment Advisor (RIA) industry reached a record 272 mergers and acquisitions (M&A) transactions in 2024, according to DeVoe & Co.’s fourth-quarter report. The numbers were record-breaking for the year, quarter, and most active month in history, with higher levels of private equity participation.

“This historic level of activity provides significant momentum heading into 2025, after nearly three years of steady deal flow,” states the report by the San Francisco-based consulting firm. In its conclusions, the report projects that “merger and acquisition activity will steadily increase over the next five or more years, barring any unforeseen events.”

RIA M&A activity remained slightly above 2023 levels from January to September 2024, making it seem unlikely that the 2022 record would be surpassed. During 2022, industry merger and acquisition activity maintained a steady pace of around 60 transactions per quarter, which continued for 11 quarters. However, 2024 ended with a record-high quarterly mark of 81 transactions, pushing the year into record territory. October was a decisive month, with 39 transactions, nearly doubling the 21 transactions recorded the previous year and surpassing the previous monthly high.

“This momentum is likely to continue into the new year, and the industry may once again be on track for a steady increase in mergers and acquisitions in the future,” said David DeVoe, founder and CEO of DeVoe & Co.

Rate Cut Momentum

According to the report, on the buyer front, the increase in activity was primarily driven by interest rate cuts that began in September 2024. Lower capital costs, implications for debt ratios, and the expectation of more cuts in the future resulted in highly leveraged acquirers easing financial constraints.

On the seller side, post-election market gains boosted valuation expectations and delayed any willingness to explore potential sales.

The fourth-quarter increase in private equity-backed buyer activity was also evident in their participation in transactions. Private equity firms were directly or indirectly involved in a record 78% of all RIA transactions in the fourth quarter of 2024, a significant increase from 69% participation in the first three quarters of the year. Announced acquisitions by major players such as Beacon Pointe, Cerity Partners, and Waverly Advisors exemplify this increase.

Shift in Buyer Dynamics

According to the report, the fourth quarter saw a change in buyer dynamics. RIA buyers captured 36% of total transactions in 2024, up from 29% in 2023, while consolidator activity fell to 44% during the year, down 3 points. The “other buyers” category (private equity firms, broker-dealers, banks, and all other RIA buyers) slightly declined, representing 20% of all transactions, compared to 24% in 2023.

DeVoe & Co. Methodology

DeVoe & Co. focuses on transactions of $100 million or more in assets under management to optimize the statistical accuracy of its reports and excludes SEC-registered hedge funds, independent broker-dealers, mutual fund companies, and other firms that do not operate as traditional RIA firms.

Trade War: Data and Two Graphs to Understand What Could Happen

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Trade war and market data — Wikimedia Commons

For investors, determining their asset allocation this year will be especially challenging. One of the main uncertainties is whether the new president of the United States, Donald Trump, will raise export tariffs and potentially spark a trade war.

Abhishek Gupta, Executive Director of MSCI Research, analyzes the situation with data from his firm and explains in a report that “nearly 40% of global corporate revenues are generated in international markets, and 18% may be at risk due to the tariffs proposed by the U.S. and potential counter-tariffs. Furthermore, the risk was evenly split between non-U.S. companies selling in the United States (8.4%) and U.S. companies selling internationally (9.7%).”

Tariff Risk by Country and Sector

Japan, Germany, the United Kingdom, China, and Canada are the top five countries (by revenue in U.S. dollars) that sell in the U.S. market. Among them, Japanese, German, and Korean automakers dominate automobile and component imports, while Chinese, U.K., and Canadian companies lead energy imports.

Capital goods and materials also make up a substantial portion of total U.S. imports, but these are more fragmented among exporting nations. Other industries, such as pharmaceuticals, food and beverages, and durable consumer goods, have accounted for a smaller share of total U.S. imports but could be at risk due to their dependence on U.S. demand.

Beyond revenue exposure, the location of a company’s production facilities can add another layer of risk. For example, several Japanese automakers produce vehicles in Mexico. Higher U.S. tariffs on Mexican imports could have a disproportionate impact on these companies compared to those that manufacture in Japan.

The following heat map analysis combines data from MSCI Economic Exposure and MSCI GeoSpatial Asset Intelligence to highlight the number of companies economically tied to the United States (defined as deriving more than 10% of their revenue from the U.S.) that have production facilities in Canada, Mexico, or China—all of which could be subject to higher tariffs.

Approximately 390 non-U.S. companies meet these criteria (of which 90 are Canadian, Mexican, or Chinese companies). Japanese companies appear to be the most exposed, with 91 at risk, including 28 in the capital goods industry and 18 in the automotive sector. Many European companies may also be at risk due to overlapping revenue dependencies and production locations.

Japanese and Chinese Companies Top the List of Those Most Exposed to Higher U.S. Tariffs

If U.S. trade partners facing higher tariffs choose to impose their own tariffs on goods imported from the U.S., American companies will suffer, as they collectively derive a quarter of their revenue from international markets. China, for example, was the largest end market for U.S. goods in November 2024, with an export value to the U.S. more than double that of the United Kingdom, the next largest importing market. U.S. exports in technology, semiconductors, energy, capital goods, and other industries are the most exposed to such potential retaliatory measures.

However, in practice, corporate supply chains can be extremely complex, and intermediate inputs may cross national and regional borders multiple times before reaching final production. The tariff impacts on companies are more complicated than they might appear.

Blue Owl Soars Across Latin America, Captivating Institutional Investors with Its Sixth GP Stakes Fund

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(cedida) Michael Rees, co-presidente de Blue Owl (izq), y Philippe Stiernon, CEO y Managing Partner de Roam Capital (der) — LinkedIn

After five iterations, specialized asset manager Blue Owl is in the process of raising capital for its sixth GP Stakes fund. This strategy aims to cover the spectrum of alternative assets by investing in a variety of prominent specialized fund managers. As part of its commercial push, the firm is focusing intently on Latin America, targeting institutional investors in the region.

“This is a very unique way to invest in private markets,” says Michael Rees, Co-President of Blue Owl, in an interview with Funds Society. From the institutional investor’s perspective, Rees highlights three key pillars of the strategy’s appeal: an “extremely” diversified portfolio, capital efficiency, and cash flows.

Sources familiar with the process reveal that GP Stakes VI is targeting $13 billion in capital. The fundraising process is approximately halfway through, with expectations that the fund will close during 2025.

Rees confirms that the strategy will begin deploying capital in early 2025. “We’ve already raised significant capital, so we can start deploying it as soon as possible,” he explains.

Latin America Roadshow

The firm’s commercial effort in Latin America has included multiple visits to the region in recent months. “We have a strong focus on Mexico, but also on Chile and Colombia,” says Philippe Stiernon, CEO and Managing Partner of Roam Capital, the firm distributing Blue Owl’s products in the region.

In 2024, Blue Owl made two trips to Mexico—in March and November—to participate in the Encuentro Amafore, one of the key events for the pension fund industry (Afores). Additionally, the firm visited Chile and Colombia during the second week of January.

“We’re very excited about this,” says Rees. “Throughout 2025, we’ll conduct more roadshows and ensure we’re accessible to our clients,” he adds.

According to Rees, there are two types of investors who will find the fund particularly attractive. On the one hand, there are clients with well-established private markets portfolios seeking a product that generates alpha and outperforms the industry. On the other hand, there are investors just beginning to explore private assets who are looking for broad exposure through a single structure.

Stiernon explains that the institutional markets in Chile and Colombia align more with the first type of investor, while Mexico falls closer to the second. Although the Afores are not new to alternative investments, their growth has been more recent. “Many Afores are gaining momentum, with positioning limits increasing. That opens up opportunities for some institutions there to make significant moves into private markets,” Rees adds.

Even in jurisdictions with pension reform challenges—such as Colombia, Peru, and potentially Chile—the executives see room for interest. “Even in countries facing regulatory challenges, this product works seamlessly. It’s truly an all-weather product,” says Stiernon.

The GP Stakes Formula

The sixth fund in the series, like its predecessors, will span all major categories of alternative assets. Its portfolio is expected to follow the same pattern as earlier versions, reflecting the broader industry.

Rees anticipates the fund will invest approximately 60% in buyout managers, with the remaining 40% split across growth capital, venture capital, infrastructure, private credit, and real estate.

This diversification is at the core of GP Stakes VI’s pitch. Rees emphasizes that the fund isn’t just diversified by the underlying assets of the managers it invests in or by GP but also by geography and vintage year.

“When we invest in a GP, our clients gain exposure to their older funds, which are still active, and also to the funds they’re likely to launch in three, five, or ten years,” Rees explains.

Another critical component is the fund’s cash flow. GP Stakes, Rees notes, is a “yield strategy” that generates returns without needing to sell its stakes in alternative managers since it invests in profitable firms. “As we invest, we’re generating cash flow and yield almost immediately. So, while you’re putting money to work, you’re also taking money out,” he says.

The Profile of GPs

As for the type of asset managers Blue Owl targets, Rees stresses that the strategy seeks industry leaders with decades-long operational horizons. “We’re looking for private market firms that are building valuable franchises we can hold a stake in for a very long time,” he explains.

While the selection of GPs serves the fund’s diversification goals, Rees says the analysis process is entirely bottom-up. The priority is determining whether the manager ranks among the best in its category. “When you think about the top 100 or 200 GPs in the industry, that’s our fishing pool,” he notes, adding that “there are real benefits to being big in today’s market.”

Size, according to Rees, filters access to the client segments driving growth. “The new capital isn’t coming from U.S. state pension funds like it did a decade ago. It’s coming from the wealth channel and geographies that are increasing their positioning,” he says, citing Mexico, Australia, the Middle East, and Asia.

“If you’re a small firm and rank 5,000th in the industry, you won’t have access to those types of clients. That’s why we’re seeing this growth phase favor the larger, branded firms,” he concludes.

Edouard Carmignac: “Donald Trump Can Be Criticized, but We Must Acknowledge That He Has a Formidable Instinct”

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Edouard Carmignac and Trump’s economic instinct — Photo: Cecilia Prieto

Edouard Carmignac had the opportunity to have lunch with the now-president Donald Trump 20 years ago. It was a business lunch where the founder, president, and CIO of Carmignac Gestion gained a good understanding of the character of the then-businessman, which has helped him assess how his second, non-consecutive term as U.S. president might unfold: “Donald Trump, for his flaws, can be criticized, but we must acknowledge that he has a formidable instinct. In a world seeking growth but that is globalized and where traditional models no longer work, his approach has an impact.” Although the president and CIO admitted that some of Trump‘s promises “include extreme proposals that may sometimes seem radical,” he also stated that “boldness and leadership are needed because the old paradigms are no longer sustainable.”

These remarks were made by Carmignac at the annual forum organized by his firm in Paris for clients and the media, which this year also marked the 35th anniversary of the firm and its flagship fund, Carmignac Patrimoine.

One of the major investment-related topics Edouard Carmignac addressed in his speech was the shift in the global political order, where he was particularly critical of countries with left-wing governments: “The classic redistribution models, which worked well in the past, are now exhausted. Resources cannot continue to be redistributed if there is no way to generate them. That is why European models face resistance and need to reinvent themselves with efficient governance.” However, despite these challenges, Carmignac maintained an optimistic outlook, asserting that “there is potential” for greater growth in Europe, and expressed confidence that European governments would gradually shift towards more conservative and right-wing positions, beginning with Germany after the elections scheduled for February.

Carmignac cited another example of a global leader, Javier Milei, with whom he had a one-hour meeting. Among the topics they discussed were economics and their shared views on the Austrian School of Economics. “I was impressed by his intelligence and his knowledge of economics. He has an unwavering determination to change Argentina and move it forward, which will have an impact not only on his country but also on South America,” Carmignac emphasized.

Among the investment themes for 2025 that Carmignac Gestion is monitoring, Edouard Carmignac highlighted that “a technological revolution is underway,” though he preferred to call it “augmented intelligence” rather than artificial intelligence. “We are witnessing a transformation that is just beginning, and those who invest in it will find great opportunities.” Regarding cryptocurrencies, he took a more cautious stance, instead emphasizing the importance of “continuing to invest in projects with real value and long-term sustainability.”

Outlook for 2025

Raphaël Gallardo, chief economist at Carmignac Gestion, provided a more detailed and specific analysis of key themes the firm is monitoring this year, positioning their funds accordingly. He began by discussing the current situation in the U.S., particularly the difficult paradox facing the new Trump administration, which has promised continued economic growth while avoiding inflationary pressures.

Specifically, Gallardo identified three factors affecting U.S. growth: the high deficit (above 6%), which will constrain budget decisions; the sustainability of the wealth effect experienced by households in recent years, driven by rising financial asset prices, which Gallardo questioned; and, related to the previous two, the evolution of interest rates, which he believes “will determine the budgetary margin,” as each movement in the cost of money directly impacts stock market valuations and real estate assets while also absorbing up to 20% of U.S. household incomes.

According to the chief economist, Trump has four key levers to navigate this challenge: reducing public spending through the newly created Department of Government Efficiency (DOGE), led by Elon Musk; promoting deregulation, particularly in artificial intelligence; implementing tariffs; and lowering oil prices by flooding the market with more barrels, which would require negotiations with Saudi Arabia and even Russian authorities, potentially leading to a resolution of the war in Ukraine.

On the other side of the world, Gallardo discussed China’s “obsession with trade surpluses,” arguing that its export figures are inflated due to the country ramping up shipments in 2024 ahead of new U.S. tariffs. Gallardo believes Xi Jinping‘s government is currently at an “impasse,” as it attempts to mitigate the negative impact of the real estate sector on the economy while trying to “set a consumption floor without altering the economic model.”

Regarding a potential new trade war between the U.S. and China, Gallardo sees multiple factors at play. He anticipates another shift in trade rules between the two nations—though he notes that Trump, unlike in 2018, is not being as aggressive with tariffs this time. He also cites other influences, such as the war in Ukraine and the ongoing fentanyl trade between the two countries.

Finally, Gallardo argues that the EU can play a key role in this historic rivalry in three ways: first, by becoming a better client for the U.S., particularly by increasing demand for American goods and services in the defense and gas sectors; second, by coordinating with the U.S. to decouple China’s technological advancement, creating a competitive advantage; and third, by leveraging deregulation within Europe to impact U.S. companies, such as enforcing stricter regulations on digital giants.