Innovation and Growth: The Drivers of Luxembourg as a European Investment Hub

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Luxembourg consolidated its position in 2025 as Europe’s leading fund domicile, with assets under management reaching 8.3 trillion euros, driven by the continued growth of alternative assets, ETFs, and sustainable finance. The industry association ALFI advanced the Savings and Investments Union agenda through the publication of its “SIU Blueprint” and the study “Europe’s Productive Capital Gap,” carried out together with McGill University.

ALFI’s annual report also highlights how fund tokenization has moved from the experimental phase into a scaling stage, supported by the development of distributed ledger technology (DLT), Luxembourg’s Blockchain IV Law, and growing market adoption. At the same time, ETFs continued gaining momentum, surpassing 500 billion euros in assets, while artificial intelligence is progressively being incorporated into multiple industry processes to improve operational efficiency and client experience. The regulatory framework also continued evolving, with particular attention on AIFMD II, liquidity management tools, valuation, AML/CFT regulation, the creation of AMLA, as well as developments related to EMIR, CSDR, T+1, the Retail Investment Strategy, DORA, and SFDR.

ALFI also strengthened its collaborative approach with the launch of the Member Collaboration Hub, a digital platform integrating industry content, collaborative workspaces, and the AI-based assistant ALFIBot. During 2025, the association organized 49 events across eight countries, with more than 12,000 registered participants, and promoted new initiatives such as Digifund, the Leadership Seminar, and the Conducting Officers Seminar. Talent development remained a strategic priority, with support for two specialized master’s programs in advanced financial management and private assets.

According to Serge Weyland, CEO of ALFI, tokenization and artificial intelligence will be transformative for the industry: “They will profoundly change access to financial products and the structure and distribution of investment funds.”

Along the same lines, Corinne Lamesch, Deputy CEO of ALFI, emphasized that recent reforms strengthen Luxembourg’s competitiveness as a European fund center by adapting its legal and tax framework to new market needs. The report also underscores Europe’s challenge of connecting savings with investment by promoting retail participation and financial education through initiatives such as Personal Investing Day and the joint ALFI/McGill study.

Sustainable finance remains a structural pillar of the sector, with Luxembourg consolidating itself as one of Europe’s leading hubs for sustainable investment in both public and private markets. At the same time, the importance of markets outside Europe continues to grow, with Asia, Latin America, and the Middle East gaining prominence as key destinations for Luxembourg’s fund industry.

According to Britta Borneff, CMO of ALFI, Luxembourg has evolved into a global hub for structuring and channeling international capital. Looking ahead, Jean-Marc Goy, President of ALFI, stated that the goal is to strengthen the country’s global competitiveness through innovation, regulatory excellence, and closer ties with society by expanding access to capital markets and promoting long-term savings.

Stablecoins and Tokenized Real Assets: The New Drivers of the Crypto Market

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According to experts, there is a unique tension in the crypto market. Evidence of this is the path bitcoin has taken during the first quarter, moving from a weak start to reaching highs not seen since February, climbing to 78,400 dollars. Now, the crypto market is beginning the second quarter in a stabilization phase. Following April’s technical rebound, institutional investor flows appear to have returned, leading to a tactical improvement rather than the start of a new bull cycle.

“In the middle of the month, bitcoin rose to 78,400 dollars last week, reaching its highest level since early February, driven by improved risk appetite following progress between the United States and Iran to reopen the Strait of Hormuz. In addition, inflows into spot bitcoin ETFs also contributed to the rally, with 664 million dollars recorded on Friday, along with a 344 million dollar short squeeze driven by the futures market, which forced the liquidation of bearish positions. From a technical standpoint, bitcoin has broken above the 76,000-dollar resistance level that had capped prices over the past two months, potentially opening the door to further gains if this momentum is sustained,” said Simon Peters, crypto asset analyst at investment and trading platform eToro.

Market entering a consolidation phase

According to Bitwise Asset Management in its quarterly report, the underlying data remains weak: the 10 largest crypto assets declined during the first quarter, with losses ranging between 23% and 38%; crypto’s correlation with equities is at its highest level since the start of COVID; and key metrics such as active addresses, transaction activity, and trading volume remain below their peaks.

This first-quarter performance contrasts with an extraordinary flow of news. “Wall Street is moving toward the onchain environment, regulators are establishing clear rules, and institutions are allocating capital. On the other hand, the underlying data is weak. This disconnect is uncomfortable. Developments are positive, but the underlying data is not. The way to resolve this tension is simple: both perspectives are looking in different directions,” said Matt Hougan, Chief Investment Officer at Bitwise AM.

Based on this data, the asset manager believes that the first quarter was indeed difficult for crypto investors. “But the news flow is forward-looking and shows there are compelling reasons to believe the underlying data will improve. In fact, if you look closely, some signs of this can already be seen. For example, assets under management in stablecoins are at record highs, tokenized real assets are gaining prominence, and stablecoin transaction activity already exceeds that of Visa,” added Hougan.

Drawing on his experience after eight years working in the crypto world, he described the current moment as “the end phase of bear markets.” “Prices are low and fundamental data is weak, but the smartest people are beginning to build again. There is something underneath that is starting to generate excitement and, if you look closely enough, you can already make out the first outlines of a new bull market,” Hougan concluded.

The Industry Eyes the Infrastructure Investment Boom Ahead

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FOTO (Wikipedia) Data center
Wikimedia Commons

Within the world of real assets, infrastructure has been presenting increasingly attractive prospects for investors. And the alternative asset industry is taking notice, benefiting from the favorable investment cycle for categories such as digital infrastructure and energy, among others.

Driven by a range of ongoing global trends — including digitalization and electrification — the coming years are expected to bring a boom in infrastructure investment. Consulting firm PwC projects that spending on these types of projects will rise to 6.9 trillion dollars by 2050, up from the 4.4 trillion dollars recorded in 2024.

“Throughout that period, cumulative global investment is projected to reach 151 trillion dollars, as countries modernize transportation, energy, and industrial systems to meet the demands of AI, electrification, and urbanization,” the firm said in a recent report.

And it is precisely these trends that are setting the pace for the market, according to Macquarie, one of the leading managers in the asset class. “Infrastructure opportunities are increasingly defined by long-term structural changes rather than short-term economic cycles,” the firm noted.

In line with these expectations, last year brought a rebound in fundraising for the asset class, reaching 250 billion dollars and more than doubling the 99 billion dollars raised by the industry in 2024 — the lowest figure in six years — according to data from With Intelligence, a unit of S&P Global Ratings.

For the firm, these figures suggest that investor confidence remains strong. “Fund managers have seen particularly high demand for strategies such as the energy transition and data centers,” they added in their report.

They also noted that this asset class is following the path of other alternative segments by expanding its investor base. Infrastructure managers, they said, are seeking capital from private banks “with the same urgency as their private equity and private credit peers.” This has sparked a race to develop products suited to a wide range of investor profiles.

The golden promise of AI

Beyond the competitive world of private capital, the artificial intelligence boom has had its own effect on the infrastructure asset space: the rise of data centers.

The excitement generated by this technology — described by many as a true industrial revolution that could affect every aspect of the modern economy — has created strong investor demand for digital infrastructure aimed at capturing this growth.

“The AI revolution, an extraordinary level of investment in data centers, equipment, chips, energy infrastructure, and other related areas continues to drive economic growth, and we see no signs that the engine is slowing,” said Stephen Schwarzman, CEO of Blackstone, during the firm’s first-quarter earnings call with investors.

The firm — the world’s largest alternative asset manager — is betting heavily on this trend through strategic investments in artificial intelligence. “We believe Blackstone has become the world’s largest investor in AI-related infrastructure,” the executive stated, adding that this gives them “a front-row seat” to future developments.

According to Macquarie, beyond data centers, digitalization is also driving demand for fiber-optic networks and communications infrastructure. Development is expanding across different markets as well: “Supply constraints in established markets are supporting pricing power and encouraging development in new regions.”

Overall, the path appears set. PwC estimates that annual investment in data center buildings will increase from 113.8 billion dollars in 2024 to 251.8 billion dollars by 2027. That represents a 2.2-fold increase in just a few years. Looking ahead, the consultancy expects this figure to reach 1.5 trillion dollars by 2032, with a “remarkable short-term escalation” followed by a period of stock improvement.

A more electric economy

Alongside AI demand and its data centers, energy has also become a major focus, supported by the broader global trend of the energy transition.

“Electricity demand is rising at a pace we haven’t seen in decades, driven by electrification, reindustrialization, and digital infrastructure,” said Bruce Flatt, CEO of Brookfield Corporation — another major infrastructure fund — during his own investor call. Meeting this demand will require “enormous amounts of new generation capacity,” he added, creating opportunities for solar, wind, nuclear energy, and batteries.

“While digitalization, decarbonization, and deglobalization will continue evolving, each is driving significant long-term demand for new infrastructure,” the executive added.

Macquarie agrees with this assessment, arguing that energy demand is expected to keep rising, underscoring the need for reliable and low-cost energy solutions. For the firm, solar and wind assets, along with battery storage, continue gaining traction — and market share — due to falling costs and rising demand.

In this segment, PwC projects that the infrastructure investment boom in energy will lift annual spending to 1.1 trillion dollars by 2050. This marks a sharp increase from the 631 billion dollars recorded by the industry in 2024, totaling 25 trillion dollars over the period.

“Reflecting the pace of electrification, by 2025 annual investment in energy storage will reach around 91 billion dollars,” the consultancy stated in its report, equivalent to 3.7 times 2024 levels. Capital allocated to transmission and distribution, meanwhile, is expected to grow 2.6 times to 472 billion dollars.

Nouriel Roubini Bets on U.S. Resilience: “American Exceptionalism Has Not Ended”

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Nouriel Roubini
Photo courtesy

During the “2026 Bolton Advisor Conference,” held in Miami, renowned economist Nouriel Roubini outlined an optimistic view of the future of the U.S. economy. Throughout his presentation, first, and later during his conversation with the firm’s Managing Director and Chief Legal Officer, John Cataldo, he highlighted the growth potential and resilience of the U.S. economy in the coming years.

The CEO of Roubini Macro Associates, a New York-based consulting firm that provides strategic macroeconomic analysis, began his presentation with a perspective on the current global regime shift, warning about the transition “from relative political stability to relative instability, or even chaos.”

“We are now in a period in which supply shocks, especially negative ones, have become significant: covid, supply chain problems, protectionism, restrictions on migration, and geopolitical conflicts, all fragmenting and deglobalizing the world economy, generating stagflation risks,” he analyzed.

Roubini warned about the shift of the global economy toward more regulated markets and the risks of lower growth and higher inflation: “This entire set of concerns indicates that our economic regime is moving away from free markets toward regulated markets, and toward a situation where growth could be lower and inflation gradually higher, what people call stagflation,” he stated.

However, when analyzing the future of the United States, he affirmed: “American exceptionalism has not ended, the U.S. stock market is not in a bubble, our debts are not unsustainable or exorbitant. The dollar is going to remain and fluctuate, but it is not going to collapse.”

For the speaker, the key to U.S. leadership lies in its capacity for innovation and technological adaptation. “Technology, historically, is a positive supply shock that increases potential growth, productivity, and reduces the cost of producing goods and services. Artificial intelligence is just the latest manifestation of that positive shock,” he explained. In his view, the current technological revolution “is more important than the invention of fire, the introduction of agriculture, the printing press, the steam engine, or electrification.”

The economist, who also serves as Professor Emeritus of Economics at the New York University (NYU) Stern School of Business, projected that this innovation cycle will allow the United States to grow faster than other developed economies. “If the United States grows faster than Europe, eventually the dollar will be stronger, not weaker,” he stated. Roubini emphasized that the acceleration of potential growth, thanks to technology and digitalization, will be the best remedy for the country’s fiscal challenges. “Having a larger deficit and growing public debt is a problem. But if U.S. potential growth accelerates, the debt-to-GDP ratio will tend to stabilize or decline,” he argued.

Along these lines, Roubini also downplayed fears about the dollar: “The honest truth is that there is no alternative. The U.S. dollar will continue to be the world’s leading reserve currency because we remain the place to invest, among others, not the only one, but the main one.”

Referring to the financial market, he rejected the idea of a long-term bubble in U.S. assets: “If one takes a medium-term view, returns for the best private technology companies, for the Nasdaq and the S&P, will be as high as in the last twenty years, and probably much higher. We are not in a bubble. This is something secular.”

By contrast, Roubini was skeptical about the supposed cryptocurrency revolution: “Calling these things currencies is incorrect. Perhaps they are crypto assets, but they are not currencies, because anyone who knows basic monetary theory understands that for something to be money or currency it must be a unit of account. Things are priced in dollars, euros, yen; nothing is priced in Bitcoin… it has to be a stable store of value, and it is too volatile.”

Regarding Latin America, he was direct: “Latin America, like most emerging markets, is a mixed picture. One must ask which country has macroeconomic stability, because without stability there is no foundation for growth. Latin America has oscillated between booms and crises, and between right- and left-wing populism. I would say things are changing in part because many of these countries learned that loose fiscal and monetary policy is a recipe for disaster.”

In the case of Argentina, he specified: “The program (of President Javier Milei) may be radical, but the type of economic adjustment that was needed required shock therapy, and that is what is being done. It will take time and involve pain, but eventually it will produce results.”

He also addressed the rivalry between the United States and China, arguing that strategic competition will persist, but that the U.S. capacity for innovation and adaptation will be a decisive factor in maintaining global leadership: “Even before Trump, there was already a kind of cold war between the U.S. and China in economic, political, military, and security matters. That competition will continue. China is an emerging power.”

Closing his presentation, Roubini emphasized that American exceptionalism remains in force, supported by institutional strength, innovation capacity, the strength of the dollar, and the resilience of the financial system. According to his assessment, the United States is positioned to experience a cycle of accelerated growth and sustain its leadership in an increasingly fragmented and challenging world.

Greater Risk Appetite Drives Global Investment Flows Into ETPs

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Global purchases of exchange-traded products (ETPs) totaled 212.4 billion dollars in April, marking their sixth-largest month of inflows on record, according to BlackRock data. The firm points to the return of risk appetite as the main reason behind the surge in investment flows into ETPs.

This rebound was largely driven by increased inflows into equities (148.4 billion dollars), which offset a slight decline in fixed-income purchases (52.8 billion dollars). Commodity flows returned to positive territory (3.5 billion dollars) following a period of investment outflows driven by geopolitical tensions in the Middle East.

Although overall fixed-income flows were similar to the previous month (52.8 billion dollars in April versus 56.5 billion in March), the figure masked a significant rotation within the asset class, according to the firm.

The return of risk appetite caused flows into rate-sensitive fixed-income assets to fall from 38.5 billion dollars to 10.4 billion dollars — the lowest level since June 2025 — while flows into spread products increased. High-yield (HY) credit rebounded from the record outflows recorded in March (-8.9 billion dollars) to post inflows of 5.3 billion dollars in April, the highest amount since May 2025, mainly toward U.S. exposures.

Investment-grade (IG) credit ETPs and emerging-market debt ETPs recorded inflows of 10.8 billion and 8.2 billion dollars in April, respectively, following relatively stable flows for both in March. Subscriptions into inflation-linked assets also remained steady, with 2.2 billion dollars added to global inflation-linked ETPs in April.

The decline in rate-sensitive flows was largely due to the collapse in short-term rate flows, which fell from 26.6 billion dollars in March to 900 million in April, although reductions were also seen across other maturities.

In March, short-term positions accounted for 69% of total rate flows, while in April this percentage dropped to just 9%, with mixed-maturity products becoming the most popular position, accounting for more than 50% of flows.

Return to U.S. positions

Investments in U.S. assets drove the rebound in flows into equity ETPs, which rose from 39.5 billion dollars in March to 121.2 billion in April, representing the fourth-largest monthly inflow on record. Purchases of U.S. equities increased across all listing regions, with flows largely directed toward large-cap exposures.

By contrast, European equity flows (-2.5 billion dollars) and emerging-market equity flows (-26.6 billion dollars) entered negative territory, while purchases of Japanese equities fell to 1.9 billion dollars.

The global emerging-market equity flow picture was once again distorted by flows listed in the APAC region, which accounted for all outflows in April (-37.1 billion dollars) and offset increased purchases in the U.S. listing region (5.4 billion dollars) and EMEA (4.1 billion dollars).

By contrast, although European equity sales were driven mainly by U.S.-listed ETPs (76% of total European equity outflows), April also saw net sales of EMEA-listed products, marking the first month of simultaneous outflows from European equity ETPs in both listing regions since December 2024.

Laura Valdez (Franklin Templeton): “A Large Part of the Growth of the ETF Industry Will Come From the Wealth Segment”

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Photo courtesyLaura Valdez, Vice President of the ETF Business Development Team at Franklin Templeton.

Franklin Templeton closed the first quarter of the year with more than $61 billion in global assets on its ETF platform. The firm proudly highlights this figure as an example of its growth and track record in the exchange-traded fund business, which began in 2013 with the launch of its first ETF and gained further momentum in 2016 with the launch of an official platform under the Franklin LibertyShares brand.

In 2025, the firm’s ETF business experienced strong growth, surpassing projected targets. This momentum was accompanied by significant expansion in the active ETF segment and an important milestone: ETF AUM surpassed $50 billion. Overall, assets grew by approximately 60% during the year, reflecting strong client demand and the continued expansion of capabilities globally. This positive trend has continued into the beginning of the new fiscal year. Currently, Franklin Templeton’s ETF platform stands at around $70 billion in global AUM, highlighting both the pace of growth and the scale achieved.

According to Laura Valdez, Vice President of the ETF Business Development Team at Franklin Templeton, the asset manager is prepared to maintain this pace of growth and, looking ahead, the firm’s ambition is to establish itself as one of the leading global ETF platforms. To achieve this, it is committed to a differentiated approach that combines active ETFs, indexed solutions, and outcome-oriented strategies, while also facilitating access to its investment capabilities across multiple global asset classes. We discussed all of this in our interview with her.

Why do you believe this growth will come from certain regions?

We are seeing growth globally across EMEA, Asia, LatAm, and the United States. The United States is our largest market, and that is obviously a reflection of the reality of the global industry. In fact, at the end of last year, there were $13.5 trillion in assets in the U.S., while UCITS ETFs represented more than $3 trillion. Consequently, the greatest growth we have observed has taken place in the United States, where the platform is larger. However, our teams are highly motivated to grow the global ETF platform with specialists based throughout Europe. Looking toward LatAm, the team has also been highly motivated because we have seen growth in the use of UCITS ETFs.

Do you see an opportunity in Europe’s recent active UCITS ETF market?

I believe Franklin Templeton entered this market at the right time. Initially, we saw many product launches, so it took some time to understand where investor flows were heading. We launched our first vehicle in 2013, and it was directly an active ETF, because we were building on the experience and track record acquired in the U.S. market. Then, formally, our ETF platform in Europe arrived in 2017 with the launch of passive and factor-based products. Since then, we have seen significant growth in assets under management, especially over the last two years. Our view is that active ETFs are the part of the business where the greatest growth can be achieved, not only in Europe, but globally.

What explains the increase in ETF flows you mention?

On the one hand, we have seen a trend toward active ETFs with global exposure, including regional and country exposures. On the other hand, and I consider this almost the most relevant factor, ETFs used to be viewed as a passive tool, but investors no longer interpret them that way. They have become a more sophisticated tool through which we can offer different investment strategies, from equities to multi-assets, including thematic and alternative investments. This shift in investors’ interpretation and use of the vehicle is significant in Europe, even though the tax ecosystem is different.

What changes have you seen in the ETF selection process among platforms, advisors, and selectors over the last 18 months?

First, I should clarify that I focus exclusively on platforms in the United States, working with banks and broker-dealers. That said, what I am seeing is that as there are more products, there is more due diligence and more competition. For example, we have seen an increase in requirements in terms of assets because analysts are concerned that a product could close. It is striking that the asset-size requirements for ETFs have continued to increase.

On the other hand, it is important to understand that the objective is not to replicate a successful product — notwithstanding structural and regulatory differences — but to recognize that these players are not looking for the same thing in every market. For example, U.S. advisors often build portfolios using U.S.-style model portfolios because they work for larger American banks and wealth managers. However, when they build portfolios, they are reflecting the U.S. investor and not what a European or Latin American investor demands. This means that launching UCITS ETFs is not about replicating what we already have or know works; it must be something specific and tailored to the investors who use UCITS.

Regarding the wealth segment, how do you think ETFs are being interpreted and used?

Globally, within the wealth segment, this shift in perception of ETFs as something merely passive is taking place. Additionally, this is a segment that appreciates the cost efficiency and transparency offered by ETFs, both in pricing and, in the case of the United States, because of tax advantages. This leads me to believe that a large part of the growth of the ETF industry will come from the wealth segment.

What does the word innovation mean in the ETF business?

I think a very interesting reflection — and one we do not make often enough — is that ETFs are being used as a real innovation tool. For example, in 2024 in the United States, we saw the launch of all the ETFs in the crypto and digital assets space. In other words, the mutual fund structure was not used to design how to invest in this new asset class. That is something significant. In addition, the SEC continues approving different digital currencies and new products, and we know this serves as a benchmark for other markets around the world. Over the past two years, we have seen new innovations, such as private fixed-income ETFs and ETF share classes for mutual funds. I believe all of this is very interesting, although I think there is still development needed in terms of market infrastructure.

Tokenized ETFs or private market ETFs: which do you believe will be the next frontier crossed by this type of vehicle?

As an employee of Franklin Templeton, I will tell you that I feel fortunate to have a CEO who has dedicated many resources to exploring blockchain technology. As a result, we have developed very interesting products such as Benji, which is a money market mutual fund that exists on the blockchain and is a tokenized product. In this sense, we already have ETFs that have been tokenized and are being distributed. On the other hand, I believe we must be very cautious when talking about private market ETFs because the foundation of the ETF is that it has a fully liquid structure.

Finally, how do you plan to compete for your place among the major ETF providers?

We are in a market with a high concentration of large players, but with market evolution and innovation, we are seeing a reduction in that concentration. For example, the growth of active ETFs has created an opportunity for Franklin Templeton to bring all its specialized portfolio management teams into the ETF space, a vehicle that offers a broad range of strategies. What is interesting is that if you analyze what is happening in the active ETF segment, that reality has begun to change. In the United States, the market share of the top 10 active ETF providers has been declining. In 2020, they held 82% of the assets, and by the end of the first quarter of 2026, that figure had fallen to 67%.

A Debate on the “Heavy Hand” of Regulation and the Rise of ETFs

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What began in 2014 as an effort to give economists a voice in an environment dominated by lawyers has now become the epicenter of empirical analysis on financial oversight. At the opening of the SEC Annual Conference, the balance of more than a decade of supervision delivered a clear warning: regulation cannot be a series of “random acts” of punishment.

One of the topics addressed during the event was the analysis of the “broken windows” policy. “This theory, adapted from urban criminology, suggests that prosecuting minor infractions prevents larger crimes. However, the analysis presented questions whether this approach can be transferred to the complex world of white-collar crime,” experts noted during the conference.

Mark T. Uyeda, SEC commissioner, explained that while empirical evidence suggests that monitoring minor infractions can reduce serious financial misconduct, the industry warns of a dangerous side effect: the diversion of limited resources. “Abusing discretionary authority undermines the predictability that markets require,” participants heard during the forum, noting that imposing sanctions over technical issues — such as the use of personal mobile devices for work communications — does not always reflect a consensus on what constitutes unacceptable conduct.

The debate also revolved around the SEC’s own success metrics. In this regard, there is concern that if the success of an administration is measured solely by the number of enforcement actions and the amount of fines collected, regulatory staff may prioritize quantity over the quality of financial justice. According to the experts, the complexity of the current regulatory framework leaves excessive room for “novel” legal interpretations that could chill socially valuable economic activities.

Beyond oversight, the conference also addressed the transformation of institutional savings through the use of ETFs. The figures are striking: in 2005, ETFs represented just 3.2% of assets compared with mutual funds. By 2025, that figure had climbed to nearly 30% of the market, with $13.4 trillion in assets.

According to some studies, a new phenomenon is emerging: managers of these vehicles may be incentivized to adopt highly volatile strategies to attract an increasingly broad base of retail investors, posing new challenges for system stability.

The conference concluded by reaffirming the need for academia to scrutinize the regulator. “In a market that now includes cryptoassets and overnight stock trading, data analysis presents itself as the only tool capable of ensuring that public policies are not merely political reactions, but decisions grounded in economic reality,” Uyeda reminded attendees.

Attractive Returns and Tight Spreads Put the Focus on Issuer Selection

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Photo courtesyDaniel Ender, portfolio manager on Robeco’s credit team.

One of the clearest trends in the credit market is how tight spreads are in historical terms. In the view of Daniel Ender, portfolio manager on Robeco’s credit team, saying that this translates into a phase of “market complacency” offers an overly simplistic view of what is happening in this asset class. In this interview, we spoke in depth with Ender about this and other trends in the credit market.

After the strong tightening of spreads in recent quarters, do you believe investment-grade credit still offers relative value, or are we already entering a more complacent phase?

I think it very much depends on how value is defined; it is quite subjective. Spreads are undoubtedly tight in historical terms, but labeling this as pure complacency is too simplistic. The key point is that the starting point for total returns remains attractive, which continues to support demand, especially from yield-focused investors. That said, if you look at spreads as compensation for risk, the picture is less convincing. We believe spreads offer a limited cushion against the range of risks that are building up in the system. So, it is not outright complacency, but rather a market supported by strong technical factors and demand for yield. From here, returns will need to come much more from issuer selection than from further broad spread compression.

What risks do you think corporate credit investors are currently underestimating?

I think the main risk is that, on the surface, everything appears to be fine, but underneath, more stress is building. High interest rates themselves are not the problem; companies have largely adapted to them. The issue is what happens when higher financing costs are combined with slowing growth and more pressure on certain business models. We are starting to see this in some market segments, especially in more leveraged companies and sectors facing disruption, such as certain areas of software. Refinancing is becoming more difficult, and at the same time, margins are under pressure. It is not a systemic problem at this stage, but it is something that could gradually spread. Markets tend to ignore it until it becomes more visible, and then the adjustment can be quite rapid.

In your case, how are you currently balancing carry and quality in the portfolio?

We are keeping the portfolio beta broadly neutral because spreads do not justify taking on more risk at this point. The focus is clearly on generating alpha through issuer selection rather than relying on beta. In practice, that means avoiding areas with limited transparency and growing stress, such as private credit proxies and BDCs; being selective in new issues where concessions are attractive; and favoring structures and sectors where compensation is structural rather than cyclical. This is not a “buy the dip” environment, but rather an environment where returns must be earned through selection.

We have seen strong resilience in corporate fundamentals. To what extent do you believe that strength can be maintained if growth continues to slow?

They have been very resilient so far, but we are starting to see early signs of pressure. Consumption is being supported by low savings levels, which is not sustainable, and the labor market is gradually weakening. At the same time, higher energy prices are pushing inflation upward and growth downward. So, we do not expect a sharp deterioration, but rather a gradual erosion of fundamentals if this situation continues.

From a sector perspective, where are you currently seeing the greatest opportunities, and conversely, where do you see the greatest risk of excessive spread compression?

We are positioning around the idea of HALO: Hard Assets, Low Obsolescence. These are sectors such as infrastructure, utilities, pipelines, or mining, where assets are tangible, difficult to replicate, and less exposed to disruption. On the other hand, we see clear risks in areas exposed to artificial intelligence disruption, particularly software, and in segments heavily dependent on private credit financing. What is interesting is that, beneath the surface, dispersion is already increasing, even though overall spreads still appear tight.

Have we already forgotten about ESG? What role is ESG integration playing in credit portfolio construction?

It remains a central part of how we assess credit risk; it has not been sidelined at all. We continue integrating ESG analysis into every issuer we cover as part of our fundamental credit work, including our internal scoring frameworks and credit committee discussions. So, it is not a separate additional layer; it is embedded in how we form our investment views. More broadly, we do not see returns and sustainability as mutually exclusive. Recent geopolitical developments have brought it back to the center of the agenda, especially in Europe, which is favorable for parts of the renewables and infrastructure space. So, if anything, ESG is evolving rather than disappearing: it is becoming increasingly linked to resilience, security of supply, and long-term credit quality.

Looking ahead to the next 12 months, what do you believe will be the main catalyst that could significantly change credit market behavior?

The main catalyst is the interaction between growth and inflation. The current energy shock is a good example of that dynamic: it is inflationary, but at the same time it weighs on growth, creating a difficult backdrop for credit. There are several catalysts that could alter that balance. A more pronounced slowdown in growth, for example through weaker employment data, including possible second-round effects stemming from artificial intelligence disruption, would be one. A prolonged conflict in the Middle East leading to structurally higher energy prices and potentially forcing a shift in central bank policy would be another. Private credit is part of the risk landscape, but we do not view it as systemic. The more relevant point is that negative headlines coming from that segment could affect market sentiment and trigger episodes of volatility in public markets. So, although the base case remains supported by solid technical factors, the main risk is that the macroeconomic environment turns out to be less benign than what the market is currently pricing in.

With the Largest Monthly Fundraising in Its History, Avenue Prepares to Enter the ETP Market with FlexFunds

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coinversiones selección gestoras
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The sharp depreciation of the dollar against the Brazilian real has been good news for Avenue. In April, the leading platform for access to the U.S. market recorded the best monthly fundraising in its history, according to Avenue’s Institutional Director, Caio Azevedo. The company does not disclose figures.

“We had the best fundraising ever recorded,” the executive says in an interview with Funds Society, attributing the movement to exchange rate volatility. “Whether up or down, we managed to attract funds very well. Usually, inflows into the platform are lower during periods of less fluctuation,” he notes.

He says the current sentiment is something similar to FOMO (Fear of Missing Out) on the part of the public, which sees the dollar at 5 reais as a good buying price. And the flow is spread across various channels, such as wealth, advisory, and family offices. The destination of that capital is concentrated mainly in the most popular U.S. equities.

“S&P, Nasdaq, ETFs, and stocks are still the main ones,” he says. “We still have a relevant flow toward the AI sector. Toward the Magnificent Seven.”

ETPs Enter the Platform

On the institutional side, Azevedo continues seeking to expand the offering of structures for the B2B market. In this context, Avenue is preparing the launch of ETPs (Exchange Traded Products) in partnership with FlexFunds, especially targeting smaller advisory firms and asset managers seeking access to offshore structures without the need to establish their own vehicles.

ETPs are internationally listed certificates — usually through Ireland and distributed by platforms such as Euroclear — that allow investment strategies to be “packaged” into a tradable asset with its own ISIN. In practice, the structure works as a simpler and more efficient alternative to traditional offshore funds, reducing operational costs and facilitating the international distribution of financial products.

“If you are an asset manager or advisor and do not have the scale to operationalize an offshore structure, the ETP solves that,” he says.

According to him, there are already conversations with more than 15 asset managers and advisory firms interested in the model. The expectation is that the structure will be operational within the next three to four months. The product is expected to function mainly as a tool for the institutional and advisory market, allowing strategies to be packaged into an international asset with its own ISIN.

Platform Launches Fund with Verde Asset

The timing could not be better for some Brazilian asset managers that have begun to see Avenue as a new way to attract resources from local investors: through international funds. With a Cayman-based structure called Avenue Funds Hub, the company created a new potential distribution channel for Brazilian asset managers interested in reaching offshore investors.

“We set up a structure that facilitates access to those funds. Everything is operationalized by Avenue,” he explains. According to him, asset managers do not necessarily need to have their own offshore structure to access the platform.

“We managed to create a simpler, more direct, and less costly structure,” he says. The movement began with names already well known in the Brazilian market, such as Kinea, Itaú Asset, and Verde, which started making global products available through the platform’s structure.

In the case of Verde, the asset manager debuts on Avenue with a global equity strategy heavily exposed to the artificial intelligence theme, betting that the current cycle of investment in technology is still far from over. The portfolio combines companies linked to infrastructure, semiconductors, and U.S. technology, reflecting the firm’s view that AI represents a structural transformation of the global economy.

“It’s curious, because when Brazilians think about investing abroad, they always imagine the major global players. But investors also want access to the brands they already know here in Brazil,” says Azevedo.

According to him, Avenue is in talks with several other Brazilian asset managers interested in accessing the international channel.

“A lot is happening, and there are names that clients would really like to access,” he says.

In addition to Brazilian funds, the company also distributes a broad international platform. Today, the platform includes more than one thousand global funds, including fixed income, equities, alternatives, and UCITS strategies.

Carmen Alonso, New Global CEO of Santander AM

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LinkedIn / Carmen Alonso, Global CEO of Santander Asset Management as of July.

Banco Santander has appointed Carmen Alonso as the new Global CEO of its asset management division, Santander Asset Management (SAM). Alonso was Head of Clients for Europe and the Middle East at the alternative asset manager Patria Investment, and her appointment will become effective next July.

This appointment comes four months after Miguel Ángel Sánchez Lozano was named interim CEO of the asset manager to replace Samantha Ricciardi in the role.

Alonso has more than 30 years of international experience in asset management and investment banking. Before serving in her role at Patria Investments, she was Head of the UK and Iberia at Tikehau Capital. Previously, she held the position of Managing Director at Morgan Stanley in the leveraged finance and debt acquisition area. She has also held senior positions at UBS, Merrill Lynch, and HVB.

She holds a degree in Business Administration from Boston University and completed the Stanford Executive Program at the Stanford Graduate School of Business. In addition, she holds an MBA from Babson College.