AI: Five Trends Already Impacting the Financial Industry

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“Artificial Intelligence Is Constantly Evolving, and That Makes It Both a Challenge and an Opportunity” — This statement was made by Elena Alfaro, head of global AI adoption at BBVA, during her presentation titled State of the Art of AI and Use Cases at BBVA, delivered at the first Funds Society Leaders Summit recently held in Madrid.

What Alfaro means is that “AI is constantly evolving, with impact across various sectors; anyone who feels it’s moving incredibly fast is not mistaken—this is a full-blown revolution.” Just one data point proves the case: ChatGPT has been the fastest-adopted technology to date, reaching 100 million users just two months after its launch. Moreover, the expert stated, “ChatGPT is the most successful product in history.”

In fact, Alfaro noted, today, OpenAI (the company that owns ChatGPT) is generating 700 million active users per week, of which around 20 million are paying users. The BBVA representative added that if the user bases of the main competitors in this field are added, there are likely more than 1 billion generative AI users worldwide. Furthermore, considering that AI is part of a technology ecosystem born in the U.S., it has taken only three years to reach 90% of users outside the U.S. (compared to the 23 years it took the internet).

Double-Digit Investment

The BBVA representative also pointed out that the drop in costs has been dramatic since its launch three years ago. This, combined with user interest, has led to spectacular growth in every sense. Reflecting this trend, job openings in the U.S. IT sector related to AI have surged by 448%, while non-AI IT jobs have contracted by 9%.

That said, hyperscalers have doubled down on their AI development investments. Alfaro recalled that the so-called Big Six increased their capex by 63% from 2023 to 2024—a figure that was already high, reaching $212 billion.

Alfaro did not shy away from acknowledging that it’s unclear whether all the major players in this race are generating profits. She cited NVIDIA as the obvious beneficiary—thanks to GPU sales—and Accenture for the success of its AI-related services business line. Additionally, she stated that OpenAI is expected to report revenues of $12 billion by the end of 2025. Even so, the expert explained that major tech firms will continue doubling down on their investments because “they are making a long-term bet on this technology.”

Five Relevant Trends in the Financial Industry

Given that something that happened in April already feels “almost like the Pleistocene” in this fast-moving space, Alfaro outlined five trends that are already impacting the financial industry and that users should understand and familiarize themselves with.

  1. Expansion of Reasoning Capabilities in Language Models
    Alfaro explained that we are now dealing with AIs that respond versus AIs that reason—and the final result can differ greatly depending on the task assigned. Reasoning AIs can break down problems through chains of thought, follow logical steps, take time to reason, and flag doubts when needed (she cited GPT-5, Gemini 2.5Pro, and Claude 3.7–4 as examples). On the other hand, non-reasoning bots offer faster responses without verifying or cross-checking information (GPT-4, Gemini 1, Grok 2, Deepseek Base). “This reasoning capability needs to keep advancing because otherwise, automating complex tasks will remain limited,” reflected the BBVA representative.

  2. Multimodality
    This refers to the shift from generative AI being text-only to now encompassing images, video, voice, music, or combinations thereof—capable of generating diverse outputs.

  3. Evolution from Assistants to Agents
    We are moving from bots that respond to human prompts to AIs that can be given goals and execute them autonomously. Alfaro forecasts that, eventually, each person could have their own “AI Chief of Staff” — capable of coordinating a group of AIs to carry out complex tasks.

  4. Integration of Data and Tools
    Currently, ChatGPT typically isn’t connected to internal corporate data sources (like Salesforce, Google Drive, Outlook, etc.), but “there is significant progress in enabling connectivity to integrate company data sources or apps.” She stressed the importance of this integration for task automation and added, “Security and compliance teams will play a fundamental role in this integration.”

  5. Growth of No-Code Tools
    “From now on, we’ll be able to do more complex things,” said Alfaro, citing Google Flows, a new tool that helps chain together processes, as an example of what’s coming next.

AI Use Cases at BBVA

Finally, the head of global AI adoption at BBVA shared that the bank is developing a portfolio of various projects across areas such as risk, operations, and software development.

One example is the mobile banking app Futura, which adapts to each user based on their activity and finances—for example, by identifying their most frequent operations and offering shortcuts. It also includes Blue, a chatbot similar to ChatGPT that answers user questions ranging from product inquiries to detailed personal finance queries.

BBVA is also engaged in a highly ambitious project grounded in the philosophy of AI adoption among employees: “This is a people project, not just a technology deployment project. Technology is very important, but it’s people who must adopt it,” she emphasized.

Launched in May last year, the initiative began by making AI capabilities available to a growing number of employees to help boost productivity, encourage creativity, and enable them to build their own assistants. The results, according to Alfaro, have been “extraordinary”: the program has achieved nearly 90% user retention and led to the creation of over 5,000 functional applications by people with no coding experience. Around 1,000 high-value use cases have already been identified and are being implemented, leveraging solutions from OpenAI and Google.

Conclusion: Better In Than Out

In conclusion, Alfaro emphasized that in the face of this revolution, “it’s better to be in than out; staying out doesn’t make much sense.”

She closed her talk on an optimistic note, asserting that humans won’t be left out of the equation. Instead, their role will evolve from task executors to orchestrators—though with important nuances: “We should always analyze tasks from the perspective of what makes sense for AI to do and what makes sense for a human to do.” She cited a study indicating that skills such as organization, prioritization, and training still require strong human involvement. In her view, the most likely outcome is a division of labor, leading to the evolution of current roles and the creation of new ones. “In that evolution, continuous training for all employees is key,” she concluded.

Rising unemployment and falling rates: Can asset securitization shield investment strategies?

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The U.S. labor market is showing clear signs of weakness. In August 2025, the economy generated only 22,000 nonfarm jobs, far below the expected 75,000, pushing the unemployment rate up to 4.3%, the highest level since 2021. This comes on top of the largest historical job revision in decades, with 911,000 positions erased from the statistics between 2024 and 2025.

 

This cooling of the labor market reinforces expectations that the Federal Reserve (Fed) will accelerate its interest rate cut cycle, with the possibility of further adjustments in the coming months.

For asset managers, this environment combines risks and opportunities, according to FlexFunds. On the one hand, traditional assets—equities and fixed income—may face limited returns and greater volatility. On the other hand, asset securitization is emerging as a key tool to diversify portfolios, improve liquidity, and enhance the distribution of investment strategies across international private banking platforms.

When unemployment rises and the Fed is forced to cut rates to contain recession risks, equity and bond returns tend to carry more systemic risks. In this context, accessing less correlated asset classes becomes a strategic priority.

Securitization allows liquid, illiquid, listed, and alternative assets to be repackaged into investment vehicles and distributed across multiple international private banking platforms. This gives managers access to cash flows different from traditional ones, reducing dependence on immediate macroeconomic performance.

A recurring challenge in times of heightened uncertainty is the need for liquidity without sacrificing diversification. Through structures such as Special Purpose Vehicles (SPVs), developed by FlexFunds, managers can transform illiquid assets into easily transferable and Euroclearable instruments, optimizing both operational and tax efficiency.

This benefit is significant: in an environment where investors demand agile and transparent solutions, securitization provides investment strategies with scalability, strengthens distribution, and facilitates capital raising in international markets.

Historically, rate cuts have increased the price of outstanding bonds, benefiting those who already had duration exposure. However, for new investment flows, a low-rate environment implies limited yields and narrower spreads.

In this scenario, the securitization of alternative assets becomes an effective way to capture attractive spreads without disproportionately increasing exposure to market volatility. Managers can offer vehicles backed by stable cash-generating assets that complement and reinforce the return structure of a multi-asset portfolio.

Competitive advantage of securitization for asset managers

Rising unemployment and the expectation of rate cuts in the U.S. mark a turning point in asset allocation strategies. In this new environment, securitization consolidates itself as a mechanism that provides competitive advantages:

  • Transforms investment strategies into a vehicle with easy access and international reach.
  • Expands the client base quickly and efficiently.
  • Enables portfolio diversification beyond equities and fixed income.
  • The creation and issuance process is fast and cost-efficient.
  • Provides liquidity to traditionally illiquid assets (such as real estate).
  • Enhances capital-raising capabilities.
  • Adds scalability to investment strategies.
  • Diversifies funding sources.
  • Involves low operational costs.
  • Can be issued on relatively small asset portfolios.

For asset managers, the key will be integrating these vehicles into portfolio architecture not as substitutes but as strategic complements that strengthen the value proposition to increasingly demanding clients in a macroeconomic environment filled with uncertainty.

With FlexFunds, it is possible to design and issue efficient, flexible investment vehicles tailored to each client’s needs. Our solutions are designed for managers seeking to scale their strategies in international capital markets and broaden their investor base.

For more information, please contact our specialists at info@flexfunds.com.

Why Invest in Chile: Legal Certainty, Skilled Workforce, and Potential

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Despite the short- and medium-term challenges Chile faces, investors remain confident in the country’s potential. This was clearly reflected in the panel “Why Invest in Chile?” held during Chile Day Madrid, hosted at Casa América in the Spanish capital.

In this expert panel, moderated by Soledad Vial, Editor of Economía y Negocios at El Mercurio, participants discussed both the strengths and the improvements needed for Chile’s economy to take off. Rosario Navarro, President of Sofofa—the trade federation representing Chile’s private business sector—opened the discussion by highlighting the country’s key advantages, particularly a “privileged environment” and strong “geological potential.” She also pointed to the steady reduction of poverty, a notable GDP, and advancing infrastructure.

David Ruiz de Andrés, CEO of Grenergy, stated that the reasons to invest in Chile are clear: the country has a stable renewable energy policy, which he called “fundamental.” He also emphasized Chile’s openness to international investment and its ability to become “a benchmark” and laboratory in sectors such as energy storage. “Chile has copper, lithium, and the best solar resource in the world,” said Ruiz de Andrés, adding that the country “could become a major data exporter.”

Vicente Huertas, General Manager of Indra Group for Peru, Chile, and the Southern Cone, affirmed that Chile continues to be a reference point, particularly in the field of digitalization. He also highlighted the country’s mobility and “excellent communications,” as well as the regulatory stability needed for long-term investments. Meanwhile, Cristián Infante, CEO of Arauco, underscored that “Chile remains attractive,” even as the company expands into new markets such as Brazil.

Challenges to Address

Panelists agreed on the need for Chile to boost economic growth. “The country needs to regain the momentum it had when we first arrived here,” said Ruiz de Andrés, who added that Chile “must believe in the enormous potential it has.” He cited Grenergy’s “Oasis Atacama” project, for which the company has brought 12 international banks into Chile.

The relationship between investors and both local and national governments, as well as with local communities, was another key topic. “I know more ministers in Chile than in Spain,” noted Ruiz de Andrés. Infante highlighted the proactive role local governments play in supporting investment, stating that this creates a “virtuous circle.” Both executives emphasized their companies’ sensitivity to local communities. “It becomes a learning process when there is dialogue with the community, because when they get to know you, they support your activity,” said Infante.

Huertas focused on advances in regulations related to cybersecurity, artificial intelligence, and other technologies “that will help develop these capabilities.” Navarro emphasized the many good practices brought into Chile that “have raised standards” and encouraged demanding high standards in relationships with local communities where projects are developed.

Electoral Outlook

The roundtable also addressed business leaders’ expectations ahead of the country’s upcoming elections. Overall, the panelists expressed little concern. Ruiz de Andrés hopes the outcome marks the beginning of a new cycle in which Chile believes in its own capabilities. Infante would be satisfied if the country stopped seeing “the glass as half empty.” He reminded attendees that Chile “has a solid foundation and all the candidates are aware of the challenges that need to be addressed.”

With Indra operating in Chile for 25 years, Huertas asserted, “We are not afraid of the elections.” He clarified that key issues like cybersecurity and digitalization “are state matters” that go beyond specific administrations and are certain to remain “a growth driver.”

Navarro shared a similar view: “The business world invests long-term and lives through many governments,” she said, adding that there is a clear consensus that Chile must return to growth—“but not at any cost.”

What the New Government Should Prioritize

Panelists also shared what they believe the new government should prioritize. Huertas suggested the need for “territorial integration,” noting a digital divide and calling for modernization of systems. Ruiz de Andrés pointed out a “huge gap” between management training and that of the rest of the workforce, concluding that “we must enable social mobility.”

Infante called on candidates to implement “efficient laws” that allow for project development, arguing that “the way to generate resources is not through higher taxes.” According to Navarro, Chile must improve its competitiveness—in taxes, permitting, labor market regulation, and productivity. She also called for reforms to the education system, stating that “the way we educate isn’t working,” and proposed dual education as a potential solution.

The Fed, the BoE, and the BoJ: Decisions Subject to the Data

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Central banks are in the spotlight this week with a very full calendar, as the U.S. Federal Reserve (Fed) speaks tomorrow, the Bank of England (BoE) on Thursday, and the Bank of Japan (BoJ) on Friday. These meetings follow last week’s European Central Bank (ECB) decision and come alongside macroeconomic data that will frame monetary policy decisions in the coming days.

“Beyond these three central bank meetings, the economic data agenda is fairly light. On Monday, manufacturing data was released in China, while Tuesday will bring industrial production figures in the EU and the ZEW business climate index in Germany. Thursday will see the release of weekly jobless claims in the U.S., which will likely attract attention following the recent weak labor report. After all, the Fed’s mandate includes ensuring full employment and price stability,” states Hans-Jörg Naumer, Global Head of Capital Markets & Thematic Research at Allianz Global Investors.

Following the Jackson Hole symposium, the Fed’s FOMC meeting is undoubtedly the most notable. BofA experts forecast a 25 basis point cut, bringing the rate to 4%-4.25%, with the 2026 median still reflecting two more cuts. “Powell’s press conference will echo labor market developments and provide insights into the tariff impact on production and prices. Rates and the exchange rate could be interpreted as an aggressive cut. In principle, ‘we rule out any possible appreciation of the dollar,’” states Bank of America’s outlook.

Regarding the data on the FOMC’s table, experts at the firm predict a solid retail sales figure for August, above consensus, which should keep uncertainty alive about the strength of spending and weakness in labor data. “Moreover, we forecast that unemployment claims will fall to 240,000 in the week ending September 13, as the previous week’s increase was mainly due to the deadline for filing claims related to flooding in Texas,” they note.

BoE: Rates to Remain Unchanged

Regarding the BoE meeting, which remains highly attentive to CPI and employment data, the bank’s experts anticipate it will maintain its stance with a 7–2 vote, with a risk of a more dovish voting pattern. “The benchmark rate will remain at 4% on Thursday. The recent emphasis by the Monetary Policy Committee (MPC) on elevated inflation expectations suggests a risk that policy will remain unchanged for the rest of the year. This week’s releases on the labor market and CPI will be key. The pace of quantitative tightening (QT) for 2025/26 will also be announced: annual sales are expected to drop from £100 billion to £75 billion, with risks skewed toward a greater reduction,” states Shaan Raithatha, Senior Economist and Strategist at Vanguard.

BofA shares a similar view: “The July labor market report should show a stable unemployment rate at 4.7% (with upside risks) and further progress in wage growth (with private sector wages growing at 4.7% year-on-year). We expect UK CPI inflation to decrease slightly to 3.7% in August, and services inflation to fall from 5% to 4.7%.”

According to Raithatha, the short-term outlook has turned more hawkish. “Upward revisions to payroll declines suggest the labor market is weakening rather than collapsing. And the MPC signaled a change in tone at the August meeting, with a renewed focus on second-round effects of elevated inflation expectations (see chart). Thus, our forecast for one more cut before the end of the year is at risk. We are inclined to postpone it until 2026 if the labor market and CPI data (due Tuesday and Wednesday) broadly meet expectations,” he explains.

In the view of David Rees, Head of Global Economics at Schroders, stagflationary pressures would also prevent the BoE from implementing further interest rate cuts. He explains that it is unlikely GDP growth will exceed 1% significantly, but capacity constraints mean even such modest growth rates will keep inflation elevated for some time.

“In fact, we fear inflation will exceed 4% in the coming months and remain above 3% at least until mid-2026. Without a sharper weakening in the labor market or fiscal tightening in the autumn budgets, it is likely that the bank rate will remain at 4% in the immediate future,” notes Rees.

BoJ: Waiting for Its Moment

In Japan’s case, experts start from the premise that the country’s outlook is mixed, with growth supported by exports but moderate domestic demand. They also note that political uncertainty—the resignation of the prime minister—limits fiscal stimulus and structural reforms. In the view of Luca Paolini, Chief Strategist at Pictet AM, the BoJ is in a wait-and-see mode. “For now, with moderating inflation in services, there is no pressure to accelerate rate hikes. But it may carry out two rate increases in 2026, and its quantitative tightening will continue,” he notes.

Edmond de Rothschild AM highlights that headline inflation slowed from 3.3% to 3.1% but still remained above the Bank of Japan’s target, while core inflation held steady at 3.4%, giving the monetary authority room to maneuver.

“We expect the Bank of Japan to keep its official interest rate unchanged at 0.5%. We believe the bank will maintain its current message of closely monitoring data as of August and that the current political instability will not affect its rate hike decisions. We forecast that core CPI, similar to Japan’s measure, will decelerate further to 2.7% year-on-year, from 3.1% year-on-year. Core CPI, as defined by the BoJ (excluding energy), should also decelerate, as anticipated by Tokyo’s main CPI,” add BofA analysts.

Carlyle Acquires Intelliflo, Financial Advisor Software Provider Owned by Invesco

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Carlyle acquires Intelliflo
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Global investment firm Carlyle and Invesco have announced an agreement under which Carlyle will acquire intelliflo, a UK-based provider of cloud-based management software for independent financial advisors (IFAs), previously owned by Invesco. According to the asset manager, this transaction includes intelliflo’s U.S. subsidiaries, including RedBlack, a provider of SaaS portfolio rebalancing tools, and intelliflo Portfolio, a portfolio management software solution for registered investment advisors (RIAs) in the U.S.

Regarding deal details, the firm states that the purchase price of up to $200 million consists of $135 million at closing and up to an additional $65 million in potential future earn-outs. As part of the transaction, intelliflo’s U.S. subsidiaries will be established as an independent company named RedBlack, managed by a separate leadership team. This separation will allow both companies to better serve their current clients and markets. intelliflo will focus exclusively on delivering leading software and innovation to the UK and Australian markets, while RedBlack will concentrate on serving RIAs and other financial advisors in the U.S. Carlyle will support the separation of both companies from Invesco and work alongside their respective leadership teams to execute their growth plans.

The investment will be funded through Carlyle Europe Technology Partners (CETP) V, a €3 billion fund that invests in technology companies across Europe. The CETP team has extensive experience in financial software, wealthtech, and sector-specific SaaS, with recent investments in companies such as SER Group, CSS, SurePay, and Calastone.

intelliflo is a critical software provider in the UK wealth management ecosystem, with a deeply loyal client base. We are excited to partner with Nick, Bryan, and their team to unlock the full potential of the company and lead it into its next phase of growth,” said Fernando Chueca, Managing Director on CETP’s investment advisory team.

For his part, Nick Eatock, CEO and founder of intelliflo, commented: “This is a very exciting moment for intelliflo. Carlyle’s investment reflects their confidence in our business, and their extensive experience in scaling software companies makes them the ideal partner for our next phase of growth. With Carlyle’s support, we will remain focused on delivering strong value to our clients, with renewed momentum in developing innovative solutions for the evolving needs of our core markets in the UK and Australia.”

“Our team is highly motivated by the opportunity to focus all our energy on the U.S. market as an independent and agile company. RedBlack has a long history of delivering market-leading software solutions to our RIA client base in the U.S. We’re excited to have the backing of a partner with Carlyle’s reputation and expertise, which will allow us to continue supporting financial advisors in the best possible way,” added Bryan Perryman, CEO of the new RedBlack.

“As intelliflo and the newly formed RedBlack begin their next growth phases alongside Carlyle, we are confident that both companies are well positioned to continue their success and innovation in the wealthtech space. We look forward to continuing our collaboration with intelliflo and RedBlack through our shared relationship with wealth advisory clients,” concluded Doug Sharp, Senior Managing Director and Head of Americas and EMEA at Invesco.

Founded in 2004 and headquartered in London, intelliflo offers a comprehensive software platform used by over 30,000 professionals across approximately 2,600 advisory firms, supporting the management of around £450 billion in client assets. Its platform includes CRM, financial planning, client onboarding, compliance workflows, and reporting functions. Its cloud-native, client-specific SaaS architecture integrates with more than 120 third-party applications. The transaction aims to strengthen intelliflo’s leadership in the UK and accelerate its growth in Australia.

Binance and Franklin Templeton Will Develop Digital Asset Initiatives and Products

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Binance, a global cryptocurrency exchange firm, and Franklin Templeton have announced a collaboration to “build digital asset initiatives and solutions tailored to a wide range of investors.” According to the announcement, they will explore ways to combine Franklin Templeton’s expertise in compliant asset tokenization with Binance’s global trading infrastructure and investor reach.

Specifically, their goal is to offer innovative solutions to meet the evolving needs of investors, providing greater efficiency, transparency, and accessibility to capital markets, along with competitive yield generation and settlement efficiency.

“As these tools and technologies evolve from the margins into the financial mainstream, partnerships like this will be essential to accelerate adoption. We see blockchain not as a threat to legacy systems but as an opportunity to reimagine them. By working with Binance, we can leverage tokenization to bring institutional-grade solutions like our Benji Technology Platform to a broader set of investors and help bridge the worlds of traditional and decentralized finance,” said Sandy Kaul, EVP, Head of Innovation at Franklin Templeton.

According to the experience of Roger Bayston, EVP and Head of Digital Assets at Franklin Templeton, investors are asking about digital assets to stay ahead, but they need them to be accessible and reliable. “By working with Binance, we can deliver groundbreaking products that meet the requirements of global capital markets and co-create the portfolios of the future. Our goal is to bring tokenization from concept to practice so that clients can achieve efficiencies in settlement, collateral management, and portfolio construction at scale,” he stated.

Meanwhile, Catherine Chen, Head of VIP and Institutional at Binance, explained: “Our strategic collaboration with Franklin Templeton to develop new products and initiatives reinforces our commitment to bridging crypto and traditional capital markets and unlocking greater possibilities.”

Inflation on Target and Resilient Growth: Has the ECB Finished Its Job?

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International asset managers believe that the European Central Bank (ECB) has entered a new pause phase. In its meeting this week, the monetary institution kept rates unchanged and, despite offering few clues, indicated that it would take more time to assess economic developments in an international context it acknowledges as complex.

“President Lagarde reiterated that future monetary policy decisions will depend on data, while emphasizing that current rates are within the range the ECB considers neutral. Growth forecasts for 2025 were revised upward to 1.2%. Regarding the political situation in France, President Lagarde stated that it is not a matter for the ECB to comment on, while conveying the message that fiscal responsibility is extremely important,” summarized Felipe Villarroel, partner and portfolio manager at TwentyFour AM (a Vontobel boutique).

For Forest, it is significant that the interest rate gap with the Federal Reserve is expected to narrow in the coming months. “With signs of a weaker U.S. labor market, the Fed could cut rates twice this year. However, price pressures related to tariffs could resurface, leaving Jerome Powell caught between political pressure from President Trump and a shrinking margin for maneuver,” explains the CIO of Candriam.

Despite political instability, this September meeting gives the impression that the ECB has fulfilled its role. “At a time when free trade is faltering, political tensions are resurfacing, and the independence of the Federal Reserve is being questioned, the eurozone can count on a credible central bank. It has managed to navigate smoothly through the turbulent environment of recent months,” notes Raphaël Thuin, head of capital markets strategies at Tikehau Capital.

Has Its Job Finished?


For Luke Bartholomew, deputy chief economist at Aberdeen Investments, the most relevant question is whether the ECB has truly concluded its easing cycle or is merely pausing before implementing further cuts in the future. In his view, the economic forecasts seem broadly consistent with the idea that this easing cycle has come to an end.

“We continue to believe that the next move is more likely to be a rate hike rather than a cut, although this may still take time to materialize. Of course, a sharp rise in France’s financing costs could still destabilize the eurozone economy and force new stimulus measures. However, an explicit ECB intervention in the French debt market still seems distant,” says Bartholomew.

In the opinion of Nicolas Forest, CIO of Candriam, with interest rates already at neutral levels, the European Central Bank has largely achieved its immediate objective of containing inflation. Although he acknowledges that, in the current scenario, the ECB is keeping all options open, its next decisions will depend on whether incoming data continue to show moderate improvements or whether U.S. tariffs and the deterioration of the Chinese economy weigh more heavily on Europe.

Irene Lauro, eurozone economist at Schroders, also sees the ECB’s decision as confirmation of her view that the easing cycle has ended. “With declining trade uncertainty, the eurozone recovery will accelerate. The risks for the eurozone have shifted from trade uncertainty to political instability, with France now in the fiscal spotlight. But the resilience of the economy and the strengthening of domestic demand mean that the ECB can afford to maintain its monetary policy unchanged,” she argues.

When it comes to cuts, Sandra Rhouma, vice president and European economist on the fixed income team at AllianceBernstein, believes there may be one more cut before the end of the year, although the monetary institution will need “compelling evidence.” Rhouma argues that the ECB is in “a good position,” as President Lagarde often repeats, which also means they could and should apply further cuts when necessary.

“I believe the data at the December meeting will be convincing enough, but we must acknowledge that the ECB’s current reaction function increases the risk that no further cuts will occur this year. Particularly given that they continue to ignore signs of falling below their medium-term target, as reflected in their own forecasts,” she adds.

In this regard, Guy Stear, head of developed markets strategy at Amundi Investment Institute, adds that by lowering the inflation forecast for 2027 to below 2%, the ECB could be paving the way for a rate cut before the end of the year. “ECB President Christine Lagarde is optimistic about growth, but we are concerned that all efforts to reduce deficits outside Germany may end up hurting consumer demand,” explains Stear.

Implications for Investors


Markets interpreted Lagarde’s comments as hawkish, further reducing expectations for an additional rate cut in the future. Following these statements, a modest bear flattening of the Bund curve occurred. “Given positioning tensions, we cannot rule out further modest flattenings in the 5–30 year segment in the short term, although we suspect that, once a rate cut is completely ruled out, the curve will begin to steepen again. The balance of risks suggests that curves will remain steep or steepen further in the medium term,” notes Annalisa Piazza, fixed income research analyst at MFS Investment Management.

According to Forest, this environment points to a period of higher volatility but also of opportunities: European growth, together with supportive fiscal measures, could sustain certain segments of equities and credit, while the prospect of rate cuts in the U.S. would increase demand for high-quality bonds.

According to David Zahn, head of European fixed income at Franklin Templeton, following the ECB’s September meeting, the decision to keep rates at 2% reflects stable inflation amid signs of slowing growth. “We consider monetary policy to remain broadly neutral, which favors short-duration bonds and high-quality defensive equities. The financial sector could come under pressure if rate expectations remain subdued, while geopolitical and energy risks require close monitoring,” says Zahn.

Some firms believe that fixed income is quietly recalibrating. According to Thomas Ross, head of high yield at Janus Henderson, investor confidence should be supported not only by the ECB’s benign view on downside risks to the economy, but also by the possibility of a new cut to add further protection and consolidate a low-volatility environment. “In our view, yield-capture strategies—such as securitized credit, corporate credit, and multi-sector income strategies—should attract greater interest from investors,” says Ross.

Family Offices Accelerate Their Professionalization and Diversification Amid Geopolitical and Regulatory Uncertainty

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A new report by TMF Group reveals that family offices are intensifying their efforts to diversify, professionalize, and align their investments with the values of the next generation, in response to geopolitical instability and regulatory changes that are transforming the global wealth management landscape.

The report, titled “Redefining Resilience: How Family Offices Are Adapting to Global Uncertainty and Next-Generation Priorities,” presents insights from leading private wealth and family office professionals and shows how political shifts in key jurisdictions have driven increased efforts in wealth relocation, restructuring, and corporate governance.

The study identifies several trends currently shaping family office strategies. Geopolitical volatility is encouraging diversification, with families entering new markets and industries—often beyond their traditional areas of expertise—to mitigate jurisdictional risks and capture growth in regions with strategic trade access or emerging economic hubs. Increasingly, decisions are based on scenario planning, using risk models that evaluate each jurisdiction’s resilience under various political and economic outcomes.

Jurisdiction selection is also evolving. While tax remains an important factor, institutional stability, legal system transparency, the depth of local capital markets, and the security of cross-border arrangements now carry more weight. Families are seeking predictable, agile regulatory frameworks that combine investor protection with operational efficiency.

The next generation of family leaders, meanwhile, remains focused on ethical investing. Interest is growing in socially responsible, environmentally sustainable, and well-governed assets. These priorities are an integral part of long-term strategy, with investments in sectors such as renewable energy, climate technology, and sustainable agriculture, accompanied by philanthropic projects aimed at generating measurable outcomes.

At the same time, the professionalization of family offices is advancing. The shift from informal advisory structures to fully integrated, multi-jurisdictional operations is accelerating, with the hiring of senior executives with international experience, the adoption of corporate-level governance frameworks, and the development of internal compliance capabilities to manage diverse regulatory standards across multiple territories.

“The private wealth management sector is undergoing a fundamental transformation. Families are not only seeking to protect their assets in a volatile world, but they are also actively redefining what resilience means, with a greater focus on diversification, operational excellence, and ethics. The most successful family offices will be those able to combine strategic agility with strong governance,” said Tim Houghton, global head of private wealth and family offices at TMF Group.

A Regional Perspective

The report also offers a regional overview. In the Middle East, investment strategies—particularly in Saudi Arabia and the United Arab Emirates—are becoming more sophisticated thanks to the professionalization of family offices, which are hiring senior executives to manage portfolios more effectively. This process requires attracting top talent with competitive incentives and benefits to retain them.

In Asia-Pacific, Hong Kong and Singapore remain leading hubs due to their connectivity with global capital flows. However, increasing requirements for due diligence and anti-money laundering compliance are lengthening onboarding processes and raising operational costs. Maintaining a strategic presence in these markets requires balancing access to regional wealth networks with growing regulatory compliance demands.

In North America, market conditions are prompting some family offices to reevaluate the geographic distribution of their portfolios and operational structures. Interest in alternative jurisdictions reflects a desire to diversify exposure and enhance flexibility in asset deployment.

Finally, in the United Kingdom and the Channel Islands, post-election reforms—including changes to non-dom rules and inheritance tax—are driving both inflows and outflows of wealth. Jersey, in particular, continues to strengthen its appeal through a solid legal framework and alignment with international transparency standards.

France: Political Instability That Does Not Threaten the Dynamics of European Markets

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France: Political Instability Raises Concerns, but Market Impact Remains Contained

French Prime Minister François Bayrou gambled everything on a single move—a vote of confidence—and lost. According to experts, France is entering a new political crisis, beginning with the challenge of addressing a €44 billion fiscal adjustment. Although this scenario had already been anticipated by some investors, the coming days will be crucial to assess the country’s ability to stabilize its political outlook and reassure markets regarding its fiscal trajectory.

“The preferred alternative for President Macron is now the swift appointment of a new prime minister, who will attempt to reach an agreement in the tense budget negotiations. Early elections remain a possibility if this fails. In any case, current developments reflect a challenge with limited room for an easy solution: fragile governments in a fragmented political landscape. Thus, uncertainty remains high, although we do not expect bond markets to derail from here,” comments Dario Messi, Head of Fixed Income Research at Julius Baer.

Experts agree that the chaos in French politics does add more volatility. Peter Goves, Head of Developed Market Sovereign Research at MFS Investment Management, sees it likely that spreads will remain wide, with episodes of short covering; however, political instability is undoubtedly here to stay. “Macron will likely rush to appoint a new prime minister as a first reaction, before considering calling new parliamentary elections. The situation is highly fluid, and how events unfold will likely dictate the market tone in the coming days. So far, the market reaction has been relatively contained, but we take into account the strikes scheduled for Wednesday and the imminent risk of a potential downgrade. Meanwhile, France still needs to pass a budget,” says Goves.

Contained Impact

According to Raphaël Thuin, Head of Capital Markets Strategies at Tikehau Capital, for now, the economic impact is uneven. “The CAC 40 companies, mostly multinationals, exporters, and with low levels of debt, appear relatively protected from political turbulence and rising interest rates. Their limited exposure to public procurement reduces their sensitivity to budget swings. Furthermore, the excess of private savings in France continues to finance part of the deficits, which mitigates external vulnerabilities,” he points out.

However, he acknowledges that two areas of concern are emerging: “In the short term, corporate taxation could become a critical issue, as several parties are considering specific reforms. In the long term, political instability and chronic deficits could gradually erode investor confidence, private investment, and the country’s attractiveness. This evolution could ultimately weigh on consumption and economic growth.”

Michael Browne, Global Investment Strategist at the Franklin Templeton Institute, notes that France has the backing of the EU, the ECB, and the euro—and it’s not going anywhere. “Its financial system is solid. It’s true that it’s the only country in Europe where spreads have widened against Germany, but only to 80 basis points. There will be no currency or funding crisis. So, whoever takes office won’t matter. Nothing is expected of them—just to weather the situation until 2027 and hope that economic improvement in Europe, driven by German Chancellor Mertz, generates enough growth to offset the risk of going two years without a new budget. The bond market remains calm, while equities have suffered more from weakness in luxury goods sales than from political turmoil. An operational government is, clearly, a luxury France will not be allowed; and when it finally gets one in 2027, markets will be ready with their verdict,” argues Browne.

France’s Risk Premium

In a context of persistent deficits and rising interest rates, Thuin considers that the issue of France’s risk premium remains key. “Although it varies by asset class, it currently seems to offer limited compensation when taking political and fiscal tensions into account. The main transmission channel of risk continues to be interest rates, in an international environment marked by a general increase in financing costs,” he explains.

According to the Julius Baer expert, political risk is already reflected in asset prices. “Before the confidence vote, the spread between 10-year government bonds of Germany and France once again approached 80 basis points, having already remained elevated for some time compared to other eurozone countries. Although primary deficits are considered unsustainable, we believe France’s current capacity to handle its debt remains relatively high, given that the country benefited for a long period from exceptionally low financing costs. In other words, early elections (or, in the worst-case scenario, Macron’s resignation) could lead to a further widening of spreads, but we expect the impact to be limited in magnitude and do not anticipate bond markets to derail from here,” he notes.

“The risk of a new dissolution of the National Assembly seems the highest to us, which would lead to a widening of the spread between French and German 10-year yields. In that case, tensions on peripheral country spreads should be more limited, not justifying ECB intervention. In the extreme scenario of President Emmanuel Macron’s resignation, the French spread would exceed 100 basis points, justifying ECB intervention to limit contagion,” says Aline Goupil-Raguénès, Developed Markets Strategist at Ostrum AM (Natixis IM), when discussing possible scenarios.

France’s Political Deadlock Deepens Fiscal Concerns, but ECB Intervention Remains Unlikely—for Now

This dynamic is part of a global trend, where inflation and growing doubts about the sustainability of public deficits are putting upward pressure on interest rates. Asset management experts acknowledge that France is not an isolated case, but its political instability could worsen its position compared to more stable partners.

“The ECB could intervene only in the case of significant tensions on interest rates that pose a risk to financial stability or to the transmission of monetary policy—which is currently not the case. It could also intervene in the event of the president’s resignation to contain spread tensions among peripheral countries triggered by contagion effects. It could activate the TPI. Announced in July 2022 and never used, its goal is ‘to counter disorderly market dynamics that pose a serious threat to the transmission of monetary policy within the eurozone,’” adds the strategist from Ostrum AM.

Possible Scenarios

Looking ahead, France faces three possible options: the appointment of a new prime minister, the dissolution of the National Assembly and the calling of new elections, or the resignation of its president, Emmanuel Macron. According to Goupil-Raguénès, the most likely scenario is the dissolution of the National Assembly, given the inability to find a new prime minister capable of broadening the government’s support in Parliament.

“New legislative elections would have to be held within 20 to 40 days of the dissolution. The outcome would likely result once again in a deeply divided National Assembly, with a probable increase in seats won by the far right, according to recent polls, though without a majority. The risk of social unrest—already present with protests planned for September 10 and 18—would be heightened. Uncertainty would rise along with the risk of an insufficient fiscal adjustment, which could keep the deficit elevated and lead to an increase in the public debt-to-GDP ratio. The risk of confrontation with Brussels would grow,” she adds.

According to the multi-asset team at Edmond de Rothschild AM, regardless of the outcome of the current political crisis, the likelihood of a meaningful reform of public finances will remain low—“to the point that financial markets themselves appear resigned and may settle for a scenario in which the budget deficit simply doesn’t deteriorate further.”

However, they note that while the situation is not catastrophic, it is worrisome, as France stands apart from the rest of the eurozone with the highest budget deficit and public debt on an upward trajectory (113% in 2024 and 117% forecast for 2025). “This deterioration in fiscal balances is mainly due to the decline in tax revenues, resulting from tax cuts granted to households (-1.6 percentage points since 2017) and companies (-0.8 points), which has not been offset by a reduction in public spending (which returned to 2017 levels after the pandemic peak). Although many parties agree on the need to cut public spending—which currently represents 57% of GDP (compared to an average of 50% in the eurozone)—it remains difficult to form a majority to adopt measures that would bring the primary deficit below the debt-stabilizing level,” they explain. They add that the status quo is likely to remain unless pressure from the European Commission—and especially from financial markets—increases, in which case tougher decisions will have to be made, likely after new legislative or presidential elections.

Finally, Alex Everett, Senior Investment Director at Aberdeen Investments, notes that while the political situation unfolds, the urgent financial need is to pass a prudent budget that reduces the deficit, no matter how unlikely that seems. “At this point, even a small reduction would be better than nothing. Confidence in the French economy is already low, and the longer this situation drags on, the bigger the problem becomes. It’s clear that France’s political gridlock won’t be resolved this year, and perhaps not even until the presidential elections in 2027. This will likely keep French government bond spreads—known as OATs (Obligations assimilables du Trésor)—elevated, at least around current levels, over the coming months. We continue to favor short positions in OATs versus their peers,” concludes Everett.

A Journey Through the Patagonian Flavors of Chile and Argentina: What Does the Cuisine of the End of the World Taste Like?

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To the sea, to the rock, to the glacier: that is what the cuisine of the end of the world tastes like. The company Cruceros Australis recently celebrated its 35th anniversary by bringing to Madrid the flavors of its cuisine, based on seafood found only in the southernmost waters of the planet through which it sails: the Strait of Magellan, the Beagle Channel, and Cape Horn.

The company offered a tasting in Madrid to showcase that its voyages also represent a full gastronomic experience. “To our journey through the most untouched and unknown part of Patagonia and Tierra del Fuego, we add a flavor experience thanks to the carefully crafted onboard cuisine and the pairing with fine wines,” said Frederic Guillemard, Australis’ manager for Europe and Asia.

As with the tasting, the cuisine offered on their cruises is prepared using locally sourced ingredients from the Chilean and Argentine Patagonian region.

“This also marks the celebration of our company’s 35 years navigating this protected route, which is accessible only via our two ships, the Ventus Australis and the Stella Australis, as it cannot be reached by land or air,” he added.

Present at the event, from Chile, was renowned Peruvian chef Emilio Peschiera, who has been advising Australis for over a decade.

The menu presented—just like on the cruise—is based on “the region’s most representative products, such as king crab, glacier scallops (large scallops), Magellanic grouper, and the region’s iconic lamb, in a carefully curated selection of the dishes served during the voyage.”

The expert highlighted that the places of origin of ingredients such as austral hake or deep-sea grouper—“which is caught at 2,000 meters, or the famous smoked salmon (sourced from some of the most pristine waters in the world), smoked with native woods like lenga”—give them a unique and unfamiliar flavor, suited to the most discerning palates.

Pairing is also a key part of this gastronomic experience. The offering includes “fine Chilean wines that enhance these flavors, such as a crystalline Sauvignon Blanc to accompany the scallops, followed by Pinot Noir paired with king crab chupe, and a red wine made from Carménère (the legendary 19th-century European varietal that survived in Chile, now the world’s largest producer) to accompany the Magellanic lamb.”

The menu consisted of two starters: octopus carpaccio with black olive sauce and crispy sweet potato threads, and a tiradito of glacier scallops with citrus sauce, mango, and chalaquita, paired with a Casa Silva Sauvignon Blanc, Cool Coast, Paredones, Chile.

Among the main courses were Magellanic king crab chupe, and a Magellanic sea duo featuring grilled conger eel over crispy a lo macho rice and oven-roasted deep-sea Magellanic grouper with olive oil and golden garlic over a potato biscuit, paired with Viña Villard Pinot Noir, Gran Reserva, Le Pinot Noir.

Next, a Magellanic lamb medallion was served over carrot purée with yogurt, paired with a Von Siebenthal Carménère, Gran Reserva.

A standout feature of these dishes is that they are prepared using regional recipes, such as the king crab pie or the lamb, which is stewed and gelled before being served as a medallion.

As for the desserts, the tasting featured a unique and typical flavor: rhubarb, a sweet-and-sour plant native to Patagonia. Specifically, a rhubarb crumble with vanilla ice cream was served.

A Commitment to Ecotourism

The fact that the entire offering is produced using regional ingredients aligns with Australis’ commitment to ecotourism—“which in this case is accompanied by bold and unique flavors,” added the Australis manager—making the journey not only an experience through the beauty of the landscapes visited, “but also one in which the tasting of our food and wines is a fundamental part of the voyage.”

The journeys last five days and four nights, departing from either Punta Arenas (Chile) or Ushuaia (Argentina).

Each day includes zodiac landings to explore native forests found only in these remote regions—accessible through treks of varying difficulty—or to observe penguins, flora and fauna, and glaciers, as well as to navigate the Patagonian channels all the way to Cape Horn, crossing the Strait of Magellan. A true voyage to the end of the world… accompanied by its cuisine.