After the liquidity episodes of previous years, starting from last year’s low point, private equity is in the process of recovery. Despite better figures and somewhat more liquidity in the market, consultancy firm McKinsey expects that the liquidity solutions the industry has been shaping in recent years will remain in place. These types of liquidity vehicles, they stated in the latest version of their Global Private Markets Report, are here to stay.
“LPs are demanding more than just paper returns,” warned the consultancy firm. “Their understandable imperative is causing LPs and GPs to rely on a full suite of liquidity solutions, such as partial realizations and a more robust secondary market,” the firm indicated in its report. Partial realizations, McKinsey explains, provide temporary liquidity relief to managers, which is something they can pass on to their LPs who are dealing with capital calls from their alternative investment programs.
Thus, in a context where the holding period of private equity assets has been lengthening, “partial realizations show that GPs are increasingly recognizing the viability of generating liquidity from an aging asset.” Furthermore, secondary transactions surpassed their 2024 record and reached new heights in 2025, growing 48% to 240 billion dollars. This figure, the consultancy firm indicated, “was driven by the ongoing pursuit of liquidity in an environment of low distributions.”
Meanwhile, they added, GP-led transaction volume reached 115 billion dollars last year. This figure, they detailed, was fueled by greater use of continuation vehicles, even with the rebound in the IPO market. With all these elements on the table, McKinsey’s conclusion is that these solutions, which have earned a spot in the private equity ecosystem, will continue to be a prominent piece despite the improvement in liquidity conditions.
Here to Stay
“Liquidity solutions, such as GP-led transactions (the majority of which are continuation vehicles), have more than tripled in value over the past five years, rising from 35 billion dollars in 2020 to 115 billion dollars in 2025,” the consultancy firm indicated in its report. Current estimates suggest that 14% of all sponsor-backed exits go through continuation vehicles. And LPs’ expectation is for that figure to increase: they anticipate that 20% of such deals will go through continuation vehicles at the end of their holding period now, and that 29% will do so in the next five years.
Along those lines, given the proliferation of these situations, investors are paying closer attention to the underlying assets and watching to ensure that liquidity does not become a breeding ground for poor management. “LPs are showing concern that continuation vehicles could be used to hide underperforming assets. Our survey indicates that around 30% of LPs consider the assets in this type of vehicle to be ‘distressed’ or ‘challenged’,” the firm stated in its report.
For this reason, McKinsey emphasizes that this underscores the need for more transparency and alignment between managers and fund contributors, “as the PE industry navigates a more complex investment lifecycle.” That said, the survey also showed that LPs are generally not penalizing GPs who use continuation vehicles to extend the life of an asset. Nearly two-thirds of respondents express a neutral or positive view of investing with firms that typically apply these types of structures.
Exchange-traded funds (ETFs) under management have reached record levels of more than $22 trillion this year, but the evolution of this industry varies considerably depending on geographic regions. A situation that poses a series of unique challenges and opportunities for both sponsors and distributors, according to a study conducted by Brown Brothers Harriman & Co. (BBH). BBH’s recent event held in London, titled “The World of ETFs: Regional Perspectives, Global Visions,” offered insights from the firm’s experts on key regional differences and the challenges facing the sector.
Challenges in the U.S. Market BBH’s Head of U.S. ETF Services, Tim Huver, highlighted the country’s position as the most mature and innovative ETF market globally. According to Huver, active ETF structures now account for the vast majority of new fund launches in the United States, attracting a disproportionate share of net inflows. He also pointed out the growing product innovation in areas such as the conversion of mutual funds into ETFs and share classes, fund cloning, and the broader benefits provided by U.S. tax regulations supporting ETFs. However, despite the boom in the exchange-traded fund business in the United States, challenges remain in the U.S. market. “In many ways, barriers to market entry have never been lower, but certain distribution hurdles persist, particularly with wealth management platforms and wirehouses, whose requirements regarding track record, asset levels, and liquidity can prove restrictive,” Huver stated.
The Potential of Latin America The discussion on Latin America focused less on product innovation and more on market access and distribution. The Latin American investment market suffers from a lack of regional harmonization, according to BBH. Daniel Montoya, Head of Relationship Management for the Americas at BBH, described how each local market has distinct regulatory, tax, and operational requirements, creating significant complexity for asset managers and their distributors. “The success of ETFs in this market depends far less on launching new products and much more on securing strong local distribution partners and establishing relationships with local market makers, as well as understanding the behavior of institutional buyers and adapting strategies country by country,” he said. Despite these challenges, Montoya believes there is ample room for growth in regional and local ETF markets. “While local ETF markets remain relatively small, demand for exposure to global ETFs is already substantial in countries like Mexico and Chile, while Brazil has built a solid retail ETF investor base,” he noted.
Evolution in Europe Andrea Murray, Head of EMEA ETF Services at BBH, described the regional adoption of ETFs as a phenomenon increasingly driven by savings plans, investment platforms, pension reforms, and government initiatives designed to encourage the transition from savings to investment. Murray highlighted the rise of platform collaborations, co-branded ETFs, and bank launches of their own exchange-traded fund products as major structural developments. The adoption of active ETFs varies across geographic regions, and although active ETFs still represent a small portion of the overall European market, Murray noted that they are “growing rapidly” due to regulatory changes that make this format more attractive to traditional active managers. “European transparency and regulatory changes—such as progress toward a Savings and Investments Union (SIU)—are accelerating the launch of active ETFs. Europe is also opening up retail distribution in markets like Germany, and we are observing an increasing adoption of actively managed ETF products,” she stated. However, Murray also identified key market challenges, including the need for specialized expertise in ETF-related capital markets in a region where having quality, highly knowledgeable distribution partners can also be critical to success. “Capital markets expertise remains the single largest operational challenge for new issuers in Europe,” she added.
Asian Fragmentation Chris Pigott, Head of Asia ETF Services at BBH, described the region as a “thriving,” albeit “multifaceted and fragmented” market that is undergoing rapid changes. Describing some unique market trends observed in Asia, Pigott added that ETF “Connect” programs with mainland China create significant cross-border growth opportunities, while digital distribution channels are also gaining increasing importance in markets like Hong Kong. “Retail investors continue to exert a strong influence on Asian markets, though their behavior can vary dramatically from one local market to another. The market is evolving rapidly, and ETF approvals by mainland China could unlock a major new market in the region,” he stated.
Conclusions Ultimately, ETFs have evolved from a mere product category into a truly global investment vehicle, and the development of active ETFs has become an increasingly dominant global growth trend. With the United States leading innovation, Europe is driving retail distribution and the adoption of active strategies through regulatory changes. Meanwhile, Asia is creating new growth models, while Latin America continues to present significant untapped market potential. In this context, the firm believes that retail investors are becoming increasingly important everywhere. Experts systematically highlighted distribution as the primary factor determining success, in many cases proving to be even more important than product creation. On the downside, there are indications, particularly in Europe, that much-needed ETF-specialized capital markets expertise is in short supply. Nevertheless, across all regions, experts agreed that the combination of active ETFs, the growth of retail investors, and the improvement of distribution infrastructure is helping shape the next phase of the sector’s expansion.
Do you already have November 3, 2026 marked on your calendar? History suggests that in the U.S. midterm elections, a low approval rating for the incumbent president could cost Republicans their narrow majority in the House of Representatives, although they have a better chance of holding the Senate. It is clear that its outcome will be relevant because control of Congress is important for fiscal policy, regulation, and public spending, three aspects that influence investments.
However, as George Brown, senior economist at Schroders, recognizes, over the years, the composition of Congress has had little influence on U.S. equity returns. “Earnings, growth, inflation, and interest rates have been much more important. Therefore, the most plausible consequence of the midterm elections is greater dispersion among sectors, and it is possible that politically sensitive areas, such as energy, healthcare, and technology, will face greater scrutiny,” he explains.
In the view of Paolo Zanghieri, senior economist at Generali AM (part of Generali Investments), the November midterm elections are likely to result in a divided Congress, with Democrats being very likely to win the House of Representatives by a narrow majority. “This increases the risk of a standoff over the debt ceiling in January 2027. An agreement extending healthcare assistance in exchange for tax cuts remains possible, but that would further weaken the fiscal outlook. We expect the deficit to close 2026 around 6% of GDP,” he points out.
The Decisive Factor
On the contrary, for Thomas Mucha, geopolitical strategist at Wellington Management, where one really needs to focus when analyzing the implications of these midterm elections is not on their outcome, but “on what does not change.” Mucha considers that the greatest investment opportunities of the next decade will not arise from radical policy changes, but from their continuation.
“Markets spend a tremendous amount of time trying to predict election results. Perhaps the most useful question is: what trends are likely to endure after the election, regardless of who wins? That list is becoming increasingly clear to me: competition with China; artificial intelligence (AI); industrial capacity; defense modernization; critical minerals; infrastructure resilience; cybersecurity; energy security; and supply chain resilience,” explains the Wellington Management expert.
According to his vision, it is possible that these issues move forward faster under one party than another. “The most important question is what the United States has already decided. I think it is unlikely that the greatest investment opportunities of the next decade will come from election surprises. They will come from the structural changes that continue long after the votes have been counted. And, increasingly, those changes point in the same direction: toward a world in which resilience, capacity, national security, and adaptation matter more than mere economic efficiency,” he insists.
The dollar and bonds
For the experts at J. Safra Sarasin Sustainable AM, this election could become an important test of investor confidence in the country’s public policy making. “For the dollar, a key question will be determining whether the composition of the next Congress alters the growth trajectory through changes in fiscal policy, trade relations, and investment linked to artificial intelligence. However, the election result could also trigger a reassessment of the risk premiums associated with uncertainty about U.S. economic policy,” the firm states.
According to its analysis, if Democrats gain control of both chambers, it would limit the legislative agenda of the Trump administration and strengthen congressional oversight. “While this scenario could moderate the fiscal momentum, it would also foreseeably contribute to strengthening confidence in U.S. institutions, reducing the political risk premiums currently priced into both long-term U.S. Treasury yields and the dollar,” they acknowledge.
In this regard, it is true that alongside the strength of AI-driven growth, concerns about the sustainability of U.S. public debt have been one of the main factors pushing long-term Treasury yields higher during the summer. “As a consequence, the historically positive correlation between long-term U.S. yields and the dollar has broken down over the past three months, a situation we would expect to reverse in the event of a Blue Sweep,” they clarify.
Additionally, experts at J. Safra Sarasin Sustainable AM acknowledge that concerns surrounding the political independence of the Federal Reserve should diminish as Democrats gain influence over the confirmation of future appointments to the central bank. “On the flip side, we expect a more restrained fiscal spending policy and a potential slowdown in data center construction to reduce some of the economic growth momentum, which could partially offset the supporting factors for the dollar,” they conclude.
Photo courtesyJohn Lloyd, Head of Global Multisector Corporate Debt at Janus Henderson.
In the view of John Lloyd, Head of Global Multisector Corporate Debt at Janus Henderson, the corporate credit market is experiencing a strong period mainly for two reasons: corporate earnings growth is solid—especially in the US—and default levels remain low. “Although spreads are historically tight, low default rates still allow for appropriate risk-adjusted pricing. However, tight valuations are forcing investors to rethink asset allocation,” he points out.
The expert considers that the asset class offering the best risk-adjusted return/volatility profile and the most potential for portfolios is corporate credit securitization, as it also provides the widest spread, particularly within the artificial intelligence (AI) sector. Regarding the outlook for higher interest rates, Lloyd views it as positive, as it enables the credit market to continue offering attractive yields. “The rise in long-term rates is driven, among other factors, by the sizable US fiscal deficit, estimated between 6% and 7% this year, creating fierce competition for capital with the private sector and AI-related issuance,” he explains.
In his opinion, another consequence of this shifting central bank outlook is that, after five years of inflation above the 2% target in the US, “investors are demanding higher real and annual rates. Flows into credit will continue to be driven primarily by absolute yield levels rather than spread widening,” he acknowledges.
The Hyperscaler Tsunami
Against this market backdrop, one of the key points highlighted by Lloyd is the massive supply of debt approaching the investment grade market to finance AI infrastructure. As he notes, corporate debt issuance is expected to exceed one trillion dollars over the next year, originating mostly from tech hyperscalers. “The tech component of the IG index is estimated to double over the next fiscal year. This huge supply has already caused hyperscalers to underperform the broader market. In light of this oversupply scenario, our strategy has remained heavily underweight in investment grade tech,” he admits.
Lloyd compares this episode to past waves of massive capital expenditure, such as the telecom spectrum rollout in the US, a period during which issuers also underperformed the index. “Spending on AI infrastructure is not a passing fad. Hyperscalers’ capex forecast will rise from over $800 billion today to $1.3 trillion by 2028, consolidating a multi-year AI investment cycle.”
Portfolio Positioning
For Lloyd, a multisector approach amplifies the benefits of active management and optimizes return per unit of volatility. Within its strategy, the firm maintains an overweight in securitized assets relative to traditional corporate debt. “Although their valuations are also tight, they offer better relative value and lower volatility per unit of spread. AAA-rated CLOs stand out, offering attractive yields—around 125 basis points in Europe compared to 80 bps for the IG index—with higher credit quality and lower volatility,” he argues.
Additionally, the portfolio maintains a short duration of between 3 and 5 years, centered at 4 years. As he explains, “this decision responds both to attractive short-to-medium-term yields and to a structural post-COVID shift. Correlations between duration and spreads have turned more positive, making duration less effective as a hedge when rates rise,” he states.
Two asset classes highlighted by the manager and included in the JH Multi-sector Income strategy are emerging market credit and high yield debt, as well as bank loans. Regarding emerging markets, he believes their fundamentals have improved, showing “more credit rating upgrades than downgrades,” while sovereign issuers “demonstrate greater fiscal discipline compared to developed market deficits.” Based on his experience, moreover, “scarce AI-linked debt issuance in emerging markets supports favorable supply-demand dynamics.”
Lastly, he notes that in the case of high yield debt, “we prefer the European loan market over the US market due to its less cyclical nature, lower software exposure, and reduced risk of AI disruption. Furthermore, euro-denominated issuance tranches offer an additional spread of 25 to 50 basis points over their dollar equivalents.”
Mutuafondo España F FI obtains Morningstar's highest five-star rating
Systematic investing occupies an increasingly relevant place in the portfolios of institutional and wealth investors worldwide. Understanding how a quantitative or systematic fund (or quant fund) operates is key to evaluating what role it can play within a diversified asset allocation.
The main difference compared to traditional management lies in how decisions are made. A discretionary manager analyzes companies or macro scenarios and makes decisions based on judgment. In a quantitative fund, the team designs a system that executes decisions according to rules established in advance, though human oversight is typically maintained. It operates like a factory of decisions built on data and statistical methods, searching for repeatable market patterns.
It all begins with a hypothesis: for example, that assets that have risen tend to continue doing so for a period of time, or that companies trading cheap relative to their fundamentals outperform over the long term. That concept is converted into concrete rules and tested against historical data before being applied with real capital.
The Stages of the Process
Although each asset manager employs its own methodology, the process generally follows four distinct phases:
Data Collection: Gathering prices, corporate earnings, trading volumes, macroeconomic indicators, and increasingly, alternative data like satellite imagery or credit card transaction records. Data quality is paramount.
Signal Generation: Producing indicators that estimate which assets are likely to outperform or underperform.
Portfolio Construction: An algorithm determines position weights by weighing expected returns, risk levels, and transaction costs.
Execution and Risk Control: Automated order execution combined with strict limits on exposure, volatility, or concentration.
Among the most widespread strategies are factor investing (seeking to capture risk premia associated with attributes like value, momentum, quality, or low volatility), trend-following strategies (typical of systematic CTAs, which take long or short positions based on price direction), and relative value or statistical arbitrage strategies (exploiting temporary mispricings between related assets).
These strategies can be applied across equities, fixed income, currencies, and commodities in any market, explaining their global reach.
Advantages and Limitations
Key strengths include strict operational discipline, the mitigation of emotional biases, the capacity to process vast amounts of data, and the ability to diversify across multiple markets simultaneously.
However, unique risks remain:
Overfitting: Designing a model that performs exceptionally well on historical data but fails to maintain results in real-time markets.
Regime Shifts: Structural market changes where historical relationships no longer hold true.
Crowding: Heavy concentration in similar strategies when numerous market participants act on identical signals. Events like August 2007, when multiple equity long-short quant funds suffered simultaneous losses, clearly illustrate this risk.
What Investors Should Evaluate
Before allocating capital, investors should review process transparency, research rigor, risk management frameworks, fee structures, and the fund’s correlation with the rest of the portfolio. A quantitative fund is neither an infallible black box nor a complete replacement for traditional active management, but rather a complementary tool that delivers a distinct, disciplined approach.
Fidelity International has launched the Fidelity Global Equity Enhanced Yield UCITS ETF and the Fidelity US Equity Enhanced Yield UCITS ETF. According to the firm, these vehicles form part of its new Equity Enhanced Yield ETF range. The objective is to provide investors with a differentiated source of income while maintaining exposure to equity markets.
The firm explains that these new ETFs combine an actively managed equity portfolio with an overlaid systematic option strategy, blending Fidelity’s fundamental research capabilities with a rules-based approach to generate additional income. ESG factors are also taken into account when evaluating investment risks and opportunities. To execute the project, each ETF will feature $5 million in seed capital provided by Susquehanna, an authorized market participant.
“Against a backdrop where market volatility continues to pose challenges for investors, we are observing growing demand for strategies capable of providing alternative sources of income while allowing them to remain invested in equity markets,” noted Neil Davies, Head of ETFs at Fidelity International.
He added: “What sets this range apart is that it offers investors access to Fidelity’s bottom-up equity research in a systematic format. At the same time, a disciplined, rules-based option strategy seeks to deliver an additional source of income, while option premiums also help buffer part of the impact from market downturns.”
For his part, Vincent Li, Head of Derivatives at Fidelity International, commented: “Options can be a powerful tool to reshape the return profile of an equity investment. Our approach is intentionally systematic, utilizing a disciplined framework to select and execute index call options with the goal of generating additional income on a consistent basis, while maintaining meaningful participation in equity markets.”
According to the company, this launch further expands Fidelity International’s active ETF offering, bringing its product suite to 28 funds. Fidelity is one of Europe’s largest active ETF providers, with $16.8 billion in active ETF assets under management.
Global financial assets reached a record €268.4 trillion in 2025, marking an 8.6% increase despite a complex economic and geopolitical landscape, according to the 17th edition of the Allianz Global Wealth Report, which tracks household assets and liabilities across nearly 60 countries.
Wealth creation effectively ran on “autopilot,” driven primarily by equity markets—which accounted for 4 out of every 5 euros of added wealth—while net savings dropped 5.4% to €4.1 trillion. However, inflation significantly tempers this record: while nominal financial assets have expanded by nearly 50% since 2019, real growth stands at just 23%, leaving real purchasing power barely 5% above its 2021 levels.
“Global wealth reached another record in 2025, but that is only half the story. Since 2019, nominal financial assets have grown by 50%, but in real terms, adjusted for inflation, they have grown by only 23%. The situation is worse in Western Europe, where financial assets in real terms are up just 0.5% compared to 2019. That compares to 21% in North America and 70% in China,” noted Ludovic Subran, Chief Economist and Chief Investment Officer at Allianz.
Portfolio Asset Allocation Makes the Difference
Developments in 2025 underscored the growing importance of household asset allocation. On a global scale, securities increased by 12.4%—more than double the growth rate of bank deposits (5.7%) or insurance and pensions (5.0%)—pushing securities to an all-time high of 46.9% of global financial assets. North American households, with 60.7% of their portfolios invested in securities, benefited the most from market performance, generating 51.4% of total global wealth growth.
This structural difference becomes even more pronounced over the long term: over the past decade, asset appreciation accounted for 71% of total financial asset growth in North America, compared to just 36% in Western Europe, illustrating the long-term impact of investing capital versus keeping savings in low-interest bank accounts.
AI as the Next Driver of Wealth—and New Vulnerabilities
Allianz Research estimates that global financial assets could grow by roughly 9% in 2026. Over the medium term, however, the backdrop becomes increasingly challenging due to slower economic growth, persistent inflation, global economic fragmentation, and elevated sovereign debt levels. In this environment, artificial intelligence could emerge as a decisive catalyst for the next phase of wealth creation. “Productivity and profitability gains associated with this technology could support asset returns, though growing reliance on markets driven by AI expectations also introduces new vulnerabilities,” the report states.
The firm notes that with the S&P 500 up nearly 95% since late 2022, a significant portion of recent wealth expansion relies on elevated valuations and AI-driven expectations. According to calculations by Allianz Research, a 25% correction in the S&P 500 could wipe out approximately $27 trillion in U.S. household wealth during the year of impact—equivalent to nearly 14% of their total net worth. Such a pullback would drag on consumer confidence and spending, tipping the U.S. economy into recession.
Furthermore, the advancement of AI raises distributional questions regarding who participates in the wealth generated by this transition. “AI could become the next major driver of wealth, but the key question is who will hold a stake in it. As AI potentially shifts more value creation toward capital, broader participation in capital returns alongside policies supporting worker adaptation will be essential to ensure the AI wealth dividend is shared more widely,” stated Katharina Utermöhl, Head of Thematic and Policy Research at Allianz Research.
Ardian, a global private investment firm with $200 billion in assets under management and supervision across its private equity, real estate, and private credit platforms, has announced the launch of the Ardian Access Infrastructure ELTIF (AAI ELTIF). This fund is designed to broaden access to private infrastructure investments for eligible investors in Europe, offering exposure to Ardian’s infrastructure investment capabilities through a single investment solution.
It is an evergreen fund that will allow private investors to access Ardian’s global infrastructure deal flow in a dedicated format. The fund invests in infrastructure both directly through its direct investment and co-investment activities, and indirectly through investments in underlying funds via its secondary market activities, which total $61 billion in assets under management.
AAI ELTIF is a new compartment of the umbrella fund Ardian Access Series Part II UCI, alongside the existing Ardian Access Infrastructure compartment. It is the latest addition to the Ardian Access platform, which offers investment solutions in an evergreen format, allowing investors to access private markets and diversify their current exposure with a tailored investment experience. ELTIFs are illiquid assets and carry the risk of partial or total loss of capital.
This launch comes at a time of strong demand for infrastructure investments, driven by underlying trends such as energy security, the energy transition, and digitalization. This asset class also offers private investors attractive portfolio characteristics, notably long-term, cycle-resilient performance, recurring cash flows, and inflation-indexed income.
Through Ardian Access Infrastructure ELTIF, investors gain exposure to:
Ardian’s pioneering strategy in the infrastructure sector, which manages $45 billion in assets and focuses on three core sectors: energy, digital infrastructure, and transportation.
A team of approximately 80 specialized investment professionals across eight offices in Europe and the Americas.
The same deal flow and institutional-grade underwriting capabilities as Ardian’s flagship infrastructure funds.
A robust, diversified portfolio of private infrastructure investments, with a primary focus on stable, developed European markets.
An approach focused on direct investments, complemented by co-investments and secondary transactions, providing additional sources of attractive investment opportunities and diversification.
Accessible investment minimums of €10,000, with the option to invest monthly and deploy capital immediately.
The fund will also make minority investments, alongside its secondary transaction and co-investment activities.
Ardian launches the AAI ELTIF in partnership with iCapital, a global financial technology platform. Ardian will leverage iCapital’s full suite of technology solutions and services for open-ended funds to provide wealth managers and their clients with efficient access to alternative investment opportunities.
“We continue to see strong demand from private wealth investors looking to build more diversified portfolios in private markets. Infrastructure can play an important role within that allocation, offering investors access to essential assets along with attractive diversification features. With the Ardian Access Infrastructure ELTIF, we are making our infrastructure strategy—backed by a 20-year track record—available to a broader investor base, supported by the same investment teams, discipline, and pipeline of opportunities as our institutional strategies,” stated Jan Philipp Schmitz, Executive President of Ardian.
Meanwhile, Daniel von der Schulenburg, CEO Infrastructure and Head of Infrastructure Germany, Benelux, and Northern Europe at Ardian, noted that he believes “this is a particularly timely moment to invest in infrastructure. Significant investment is needed across Europe to drive the energy transition, strengthen energy security, and execute the next phase of digitalization, with private capital playing a key role in backing that transformation. Our strategy focuses on essential infrastructure underpinning daily economic activity, where demand can remain resilient through economic cycles and revenues are typically regulated or contractually fixed, delivering recurring cash yield while linked to inflation. The combination of these long-term structural investment needs and the fundamental characteristics of infrastructure makes this asset class particularly compelling today.”
Ali Dibadj, Chief Executive Officer of Janus Henderson.
Janus Henderson has announced the receipt of all necessary regulatory approvals to complete the acquisition of Rantum Capital, a Frankfurt-headquartered private markets investment firm specializing in private credit and private equity solutions across the DACH region. According to the firm, the acquisition strengthens Janus Henderson’s capabilities in private markets and expands its footprint in Europe, an important institutional market for the company.
“We are delighted to welcome the Rantum team to Janus Henderson. The completion of this acquisition reinforces our capabilities in private markets and enhances our ability to meet growing client demand for private credit and private equity solutions in a market of significant strategic importance,” noted Ali Dibadj, Chief Executive Officer of Janus Henderson.
For his part, Dirk Notheis, Co-Founder and Managing Director of Rantum Capital, stated: “The entire Rantum team is excited to become part of Janus Henderson. We share a strong entrepreneurial culture and client commitment, and by combining our local expertise in private markets with Janus Henderson’s global reach, we believe we are well positioned to create long-term value for investors across Europe.”
The asset manager highlighted that the acquisition of Rantum further expands Janus Henderson’s private markets platform, leveraging capabilities added through recent acquisitions and strategic partnerships, including Privacore, Victory Park Capital, and NBK Capital Partners. “Combined with the firm’s established fixed income franchise, these capabilities strengthen Janus Henderson’s ability to offer clients access to opportunities across both public and private markets,” they stated.
“If you have risk in your portfolio, now is the time to buy hedges.” This advice comes from Pilar Gómez Bravo, Co-CIO of Fixed Income at MFS Investment Management, speaking at the MFS Iberia Summit 2026. Her presentation centered around four key axes: the impact of scarcity on fixed income, geopolitical risk, the Fed’s pivot under Kevin Warsh’s new mandate, and the circularity of AI investments. The expert analyzed how these factors are changing how risk is quantified in fixed income and explained how she and her team are approaching it, maintaining an overweight position in credit. “We are entering a world where we will see more volatility across credit, equities, and rates,” she warned.
Why Scarcity Matters
The analysis first focused on the upward trend in commodities, with an accumulation of crowded trades across various segments—not only in oil and energy costs in Europe, but also in agricultural raw materials. “The only area where we are not seeing large spikes is in metals,” Gómez Bravo clarified. She interprets commodity behavior as “an indicator of supply shocks” and believes these inflationary trends “will continue, at least in the short term, unless we see a drastic reduction in the cost of oil or end the wars, particularly in the Middle East as well as in Russia and Europe.”
Goods scarcity stemming from geopolitical developments and strong demand for AI infrastructure occupied a major portion of the presentation. “Artificial intelligence infrastructure is absorbing all the funding, crowding out other necessary types of investments.” For Gómez Bravo, this scarcity conflicts with the premise that had guided the AI boom: productivity gains leading to a disinflationary impact. “The problem is that we face an acute period where this scarcity of goods—whether chips, conductors, or the required labor—is generating higher cost inflation, and we are not yet seeing the productivity surge. Central banks cannot ignore the fact that, at least for the next few years, we will see this pressure on corporate costs as companies pay up for scarce materials,” she reflected.
This capital scarcity is reflected in the surge of AI-linked fixed income issuances. As an example, Gómez Bravo noted that in the third quarter alone, SoftBank issued $55 million in CCC-rated high-yield bonds to finance a data center, placed at a 9% coupon with $13 million in oversubscription—a sign that investors are demanding higher yields given the volume of debt companies are issuing. “We see that many issues in the credit market are being absorbed, but at the expense of wider spreads. If we previously thought this environment might continue to drive spreads tighter, we now believe these issuances will cause us to hit the floor. Therefore, ‘buy the dip’ no longer makes as much sense as before, because you will be hit with further supply without the technical tailwinds to keep narrowing spreads,” she summarized.
This does not mean carry has lost its appeal. Gómez Bravo considers a defensive carry position still attractive. For her, the “canary in the coal mine” is CCC-rated debt, where spreads have widened, though she views the move not as “alarming,” but as something to monitor closely.
Gómez Bravo also highlighted the rise in off-balance-sheet financing and noted that “circularity is becoming increasingly complex.” This involves not just hyperscalers with strong cash positions, but also secondary AI-related businesses, such as neocloud providers with weaker financial standing, which are entering lease agreements with hyperscalers to backstop their debt and build necessary infrastructure. “I am not saying this is inherently bad, as client financing has always existed, but for those of us in this business for many years, it starts raising red flags,” she added.
What Credit Is Telling Us
The expert and her team are monitoring signals in the fixed income market to identify areas where risk must be reassessed. “Credit will be the leading market risk indicator,” she stated, pointing to the non-alarming yet noticeable uptick in CDS across segments like semiconductors.
Given widespread low volatility, including in currencies, Gómez Bravo affirmed that “now is the time to buy hedges” as a cost-effective way to protect against anticipated risk spikes. “The moment financial conditions begin to tighten, companies may have to go back to shareholders for the capital required to invest in that infrastructure,” she stated regarding AI infrastructure businesses.
The heavy volume of issuances from AI-linked companies is also driving up funding costs for other issuers, including the U.S. government. Pointing to macroeconomic data and capital expenditures in particular, she noted that “outside of AI, we are not seeing significant momentum in other sectors,” concluding: “All allocation risk boils down to AI vs. non-AI.” The impact on the U.S. economy is significant, as AI capex and the wealth effect from equity rallies directly affect purchasing power, particularly for baby boomers.
She noted emerging signs of stress alongside widening CCC spreads, referencing Fitch expectations of a 6% default rate in private credit.
How the U.S. Treasury Is Operating
Gómez Bravo stated that the U.S. Treasury is following a formula previously deployed under Janet Yellen: reducing long-term issuance in favor of short-term Treasury Bills. “What Kevin Warsh is attempting to do is adjust the composition of the Fed’s balance sheet before beginning to shrink it.”
A second tactic involves incentivizing demand for stablecoins as a means to introduce “another buyer of Treasuries.” In her view, the deregulation promised for Trump’s second term responds to the need to “find more buyers for its debt” in a market where foreign buyers are retreating due to elevated national debt loads, polarization, and fragmentation. Gómez Bravo asserted that “the U.S. has run out of savings.” While AI infrastructure financing draws substantial capital, she observes a supply-demand mismatch pushing costs higher. “That is why we do not foresee a major market catalyst driving a sudden collapse in U.S. real rates,” she concluded.
MFS Macro Outlook
Finally, Gómez Bravo summarized MFS’s fixed income outlook and positioning. The firm does not anticipate a near-term recession, as corporate and household fundamentals remain resilient across the U.S., Europe, and emerging markets.
She also expects central banks to re-synchronize on rate hikes following energy and Middle East pressures. However, she believes much of this movement is already priced in: “Opportunities exist to position across curves and countries, but it is difficult to hold high conviction on a long duration position.”
Nor does the firm expect fiscal discipline from governments. “We maintain that government debt financing will depend on which part of the curve they choose to fund, and what policies they deploy, as deficits remain a persistent source of volatility.” In this regard, Gómez Bravo sees “significant fragility” in the U.S., pointing to a K-shaped economy, 7% mortgage rates, and credit card debt reaching 30%. “We see a clear divide between the haves and have-nots,” she summarized, noting that the cost of capital continues to rise, impacting both corporations and consumers. “It is difficult to envision avoiding an economic slowdown unless AI infrastructure investments continue at this pace.”
MFS considers the U.S. yield curve to have flattened significantly and rules out another rate hike in December. The firm currently maintains a neutral stance on the front end of the curve, holding selective long-end exposure through derivatives.
