LinkedIn / Kathleen M. Hutchinson, Director of the SEC Office of International Affairs.
The U.S. Securities and Exchange Commission (SEC) has announced the appointment of Kathleen M. Hutchinson as the new Director of the Office of International Affairs (OIA). The OIA is the department responsible for advising the Commission on international policy, coordinating with regulatory authorities around the world to facilitate cross-border oversight and enforcement, and providing technical assistance.
Hutchinson had served as Acting Director of the OIA since January 2025. Her career at the SEC began in 2003 as a staff attorney in the Office of Compliance Inspections and Examinations (now the Division of Examinations), before joining the OIA in 2008. Within the office, she has held several leadership positions, including Associate Director and Deputy Director, and has served twice as the office’s Acting Director.
“Kathleen has demonstrated a deep commitment to public service and to our mission for more than two decades. I greatly appreciate her willingness to take on the permanent leadership of the Office of International Affairs. She has successfully led numerous international initiatives alongside our counterparts abroad, and I have complete confidence in her continued leadership and guidance on international policy and cooperation,” said Paul S. Atkins, Chairman of the SEC.
For her part, Kathleen Hutchinson said: “The extraordinary talent of the team in the Office of International Affairs makes it a true privilege to work every day in service of investors and our markets. Advancing the SEC’s international priorities through collaboration with foreign counterparts—on policy and supervisory matters, as well as enforcement and technical assistance—is essential to enabling the SEC to fulfill its mission. I am grateful to Chairman Atkins for this opportunity and look forward to continuing to work with the Commission, my colleagues at the SEC, and international authorities to address the regulatory challenges facing global markets today.”
Hutchinson holds a Juris Doctor and a master’s degree in International Relations from the Washington College of Law and the School of International Service at American University, as well as a bachelor’s degree from Binghamton University. She began her legal career in private practice at law firms in Washington, D.C., and New York.
After years of operating without a physical headquarters, CFA Society Brasil has entered a new phase of expansion. The association, which brings together professionals in the country certified by the CFA Institute, reopened its office in São Paulo this year. The goal is to use the new facilities as a base for expanding its influence in the financial market, strengthening its presence beyond the Rio–São Paulo corridor, and increasing the number of events and educational initiatives it offers.
“The Society remained active over the past few years, but we believe we can do much more with the return of the office,” says Lucas Dolabela Barcellos Correa, President of CFA Society Brasil, in an interview with Funds Society conducted at the institution’s new headquarters. The office opened on May 27 on Fidêncio Ramos Street, in the Vila Olímpia neighborhood. “We want to attract new candidates, create value for our members, and positively influence the market,” he says.
The decision to close the previous office was made during the pandemic. Because the CFA exams required in-person attendance and there was uncertainty about how long the health crisis would last, both the CFA Institute and local societies implemented cost-cutting measures. The Brazilian headquarters, located in the Faria Lima district, closed in 2020.
According to the president, the lack of a physical headquarters somewhat limited the organization’s ability to coordinate and integrate its activities, even though the Society continued promoting events and initiatives throughout that period.
“When you dismantle an office, it may seem like you’re only losing a physical space, but it involves much more than that. It’s about having the team together and having a central location for activities. We lost some of that,” he says. CFA Society Brasil currently has 1,822 members and plans to use the new office to expand its role in discussions on the development of Brazil’s capital markets.
“We remain very focused on broadening the reach of our initiatives and strengthening our presence among the market’s key players,” Correa says.
Part of this strategy involves strengthening ties with higher education institutions and training new professionals. The organization continues to run initiatives such as the Research Challenge—a global equity research competition for university students—and seeks to expand its presence at educational institutions outside the traditional hubs for training financial market professionals.
“We need to have a stronger presence at universities,” he says. According to Correa, the idea is to introduce students to the profession early in their careers and present the CFA designation as an option for professional development.
The expansion also includes an institutional engagement agenda. The Society regularly participates in public consultations organized by the Brazilian Securities and Exchange Commission (CVM), maintains dialogue with organizations such as Anbima and Previc, and seeks to contribute to discussions on financial market regulation and best practices.
“We try to be present and express our views in ways that help guide the market in the right direction,” he says.
Another initiative to broaden the organization’s reach is the introduction of specialized certifications developed by the CFA Institute. In addition to the traditional CFA Program, the Institute has been creating credentials aimed at specific market niches, such as ESG, private markets, and Investment Foundations.
A key development is that some of these certifications are expected to be translated into Portuguese over the next few years, reducing one of the main barriers to entry for Brazilian professionals.
“Translating these certifications into Portuguese will be very beneficial in attracting more people to our community,” Correa says.
However, the change has sparked internal discussions among CFA societies worldwide. Since these programs do not require candidates to complete the full CFA Program, it has not yet been decided whether professionals who earn these new credentials will be eligible for membership in local societies.
“For now, it’s an open question. We’re seeing a different audience profile from the traditional CFA Charterholder, and we’re still discussing how this fits within the Society,” he says.
According to Correa, this is a strategic issue for the organization. On the one hand, these certifications could significantly broaden the reach of the CFA brand; on the other, they introduce a new type of professional into the organization’s ecosystem.
Expansion Beyond São Paulo
Although nearly 80% of its members are concentrated in São Paulo, the organization aims to expand its regional reach. Plans include holding events in state capitals such as Belo Horizonte, Porto Alegre, Brasília, and Curitiba, as well as fostering closer ties with universities and professionals in other parts of the country.
“We need to have more influence outside this region as well. It makes sense to have a stronger presence beyond the traditional financial hub,” the executive says.
In addition to geographic expansion, the Society aims to increase the prominence of its events and strengthen relationships with members throughout the country. The plan is to use the new office as a meeting place for discussions on investments, regulation, financial education, and the development of the capital markets.
Attracting New Professionals
The growth strategy also includes training new CFA candidates. The organization runs university programs—such as the Research Challenge, a global equity research competition—and initiatives aimed at integrating women into the financial sector.
One highlight is the Women in Investment Management (YouWIM) program, which selects female university students for an immersive experience in the financial market and seeks to connect them with internship opportunities at banks, asset managers, and other financial institutions.
“We want to bring more women into the financial market,” Correa says.
According to him, the initiative seeks to increase female representation in a sector historically dominated by men while introducing future professionals to the CFA ecosystem during their university years.
Correa emphasizes that the goal is to expand the reach of the certification without compromising the technical rigor that defines the program. Today, only a small fraction of Brazilian financial market professionals hold the designation.
“We’re talking about roughly 1,800 people in a market that may have between 500,000 and 700,000 professionals. It’s an extremely powerful differentiator,” he says.
He also notes that the CFA Program requires approximately 900 hours of study spread across three exam levels, and only a portion of candidates complete the entire process without failing an exam.
Ethics as a Core Value
Although the market often associates the certification with technical investment expertise, Correa says the organization’s primary mission remains promoting the highest ethical standards of the profession.
“Here we’ve talked a lot about valuation, discounted cash flow, and technical skills. But the CFA was founded, to a large extent, on ethics. It’s a recurring subject in every exam and one we reaffirm every year,” he says.
In his view, the Society’s role extends beyond professional education; it also involves participating in public consultations, regulatory debates, and discussions about the future of Brazil’s financial market.
“We want to be the industry’s benchmark and the gold standard for ethics,” he concludes.
Who Is Lucas Dolabela Barcellos Correa?
The current President of CFA Society Brasil, Lucas Dolabela Barcellos Correa, built his career in the financial market before moving into the corporate sector. A graduate of IBMEC, he began his career at Itaú BBA, where he spent several years working in product- and client-related roles. He earned the CFA charter in 2015 and soon afterward joined the organization’s board of directors.
After completing an MBA abroad, he returned to Brazil to launch Horizonte Capital, an investment vehicle focused on acquiring small and medium-sized businesses. He later transitioned to the real economy and currently serves as Chief Financial Officer (CFO) of Dome Serviços Integrados, a logistics company associated with the Port of Açu that specializes in supporting offshore operations for the oil and gas industry.
Correa’s own professional trajectory reflects one of the changes that CFA Society Brasil seeks to communicate to the market: the certification is no longer limited exclusively to investment managers and analysts.
According to him, an increasing number of professionals in the real economy—such as CFOs, corporate finance executives, and specialists in mergers and acquisitions (M&A) and financial planning—are pursuing the program to deepen their technical knowledge and advance their careers.
“More and more people within companies are seeking this knowledge to set themselves apart. Today I’m a CFO, and I still see tremendous value in the CFA,” he says.
On the morning of June 25, 2025, the Mexican financial system discovered that, in certain circumstances, the difference between an accusation and a sentence can be nothing more than a press release. Unbeknownst to anyone at the time, that day would be etched into the history of the country and of finance in the region, while CI Banco, Vector Casa de Bolsa, and Intercam Banco would never again see another day without the shadow of suspicion hanging over them. It was the beginning of the end.
What happened that day was historic for two reasons:
It was the first time the United States used the powers granted under legislation stemming from the fight against fentanyl to act directly against Mexican financial institutions.
Although it was technically not a traditional sanction by the Office of Foreign Assets Control (OFAC), it did impose restrictions on certain transfers and transactions involving the U.S. financial system, which in practice triggered a severe erosion of market confidence.
The fate of the accused institutions had been sealed. There were no handcuffs, raids, or court orders. Nor was there a final ruling from Mexican or U.S. courts. A document issued in Washington by the Financial Crimes Enforcement Network (FinCEN) of the United States Department of the Treasury was enough for three Mexican financial institutions—CI Banco, Intercam, and Vector Casa de Bolsa—to begin the path toward their disappearance as participants in the national financial system.
The accusation was devastating: facilitating money laundering operations linked to fentanyl trafficking and Mexican criminal organizations. The tool used was equally significant. For the first time, Washington invoked powers granted under legislation specifically designed to combat the financing of the synthetic opioid trade.
From that moment on, it no longer mattered whether judicial proceedings had been initiated, whether additional evidence would emerge, or whether the institutions would be able to defend themselves. In financial markets, the presumption of innocence rarely survives the loss of access to the U.S. financial system.
Clients began withdrawing funds, international correspondent banks reviewed business relationships, and counterparties, trustees, investment funds, and service providers activated contingency protocols. The question was no longer whether the three institutions could prove their innocence, but how long they could continue operating under suspicion.
The Mexican government responded by demanding evidence and defending the strength of the national financial system. Authorities insisted there was insufficient evidence to substantiate illicit activities and opted for temporary interventions aimed at preserving stability and protecting clients. But the market had already delivered its own verdict.
Because in global finance, there are institutions too big to fail, but there are also institutions too heavily accused to survive.
One year later, the cases of Vector, Intercam, and CI Banco left an uncomfortable lesson for Mexico and for any economy integrated into the international financial system: the U.S. dollar is not only the world’s reserve currency; it is also a foreign policy instrument and a mechanism of financial discipline capable of crossing borders without the need for judicial rulings.
This story is not merely about three Mexican institutions. It is about the immense power the United States continues to wield over the global financial infrastructure and how, under certain circumstances, an accusation issued from Washington can have deeper and faster consequences than any judicial decision handed down in another country. One year ago, the Department of the Treasury made the accusation, while the market, clients, and counterparties did the rest.
Financial Death
On June 25, 2025, the United States Department of the Treasury reminded the world of a truth that financial markets have known for decades but that is rarely seen so starkly: in global finance, it is possible to survive a bad investment, a liquidity crisis, or even a recession, but it is virtually impossible to survive being shut out of the U.S. financial system.
With the designation by the Financial Crimes Enforcement Network (FinCEN) of Mexico’s CI Banco, Intercam, and Vector Casa de Bolsa as institutions of “primary money laundering concern” in connection with fentanyl trafficking and Mexican criminal organizations, the new powers derived from U.S. legislation specifically designed to combat the financing of the fentanyl trade were officially deployed against financial-sector companies in a partner country.
Formally, it was not a judicial sentence. In practice, it was. Because within the international financial system there exists an unwritten but unmistakable concept: financial death. With the Department of the Treasury’s announcement alone, the fate of CI Banco, Vector, and Intercam had been sealed, and their disappearance became only a matter of time.
Financial death does not mean the immediate closure of offices or the automatic revocation of a banking license. Nor does it require a liquidation order or a final judicial ruling. Instead, it occurs when counterparties stop returning calls, correspondent banks terminate relationships, clients begin withdrawing funds, and the rest of the market decides that the reputational cost of continuing to do business has become too high.
That is exactly what happened. Within hours, questions began coming from institutional clients, trust settlors, exporting companies, fund managers, and corporate treasuries. The issue was not whether the allegations were true or false. The issue was much simpler: what happens if tomorrow this institution loses access to U.S. dollars?
In a globalized financial system, that question alone is enough to trigger a stampede. Mexican authorities responded by defending the strength of the national financial system and demanding that Washington provide concrete evidence supporting its allegations. The official response was clear: if crimes had been committed, Mexico would act, but the accusations had to be supported by verifiable evidence.
However, financial markets rarely wait for the courts. The financial business operates on an extremely scarce commodity: trust.
Trust has one uncomfortable characteristic: it takes decades to build and only hours to disappear. The administrative intervention of the three institutions by Mexican authorities sought to contain systemic risk and protect depositors and investors, while confirming something many market participants understood from the very first day: the problem was no longer legal, but reputational and operational.
Over the following months, there was a slow but steady migration of clients, assets, and business from the accused institutions to other firms in the sector. Deposits declined, business relationships deteriorated, and the dismantling of much of the business the three entities had built over decades began.
The question that remains one year later is an uncomfortable one for Mexico: Can a foreign government effectively destroy Mexican financial institutions without a judgment issued by the country’s own courts? The answer over the past year appears to be yes.
Not because the United States has jurisdiction over Mexico, but because it possesses something arguably even more powerful: control over the world’s reserve currency, the international payments system, and access to the U.S. dollar. For many institutions, being shut out of the U.S. financial system is equivalent to losing access to oxygen.
The paradox is evident. For decades, financial globalization was described as a process of integration and efficiency. The cases of Vector, Intercam, and CI Banco revealed the other side of the phenomenon: the concentration of global financial power in a handful of critical infrastructures controlled directly or indirectly by the United States.
SWIFT, correspondent banking, dollar clearing, and international markets form a network whose main gateway remains in Washington and New York. And whoever controls the gateway largely controls who gets in and who stays out. That is why this case will likely be studied for years in schools of economics, law, and international relations.
Not only because of the money laundering allegations, and not only because of the fight against fentanyl, but because it demonstrated in practical terms the geopolitical reach of the U.S. dollar in the twenty-first century. One year ago, the Department of the Treasury issued an accusation, but the market delivered the sentence—and that may well be the most important lesson of the entire story.
Photo courtesyJuan Hernández, Head of the Americas (Ex-U.S.) at Vanguard
Five years after taking charge of Vanguard’s Latin American operations, Juan Hernández continues to strengthen his profile within the firm. Vanguard has now announced an expansion of his leadership responsibilities, elevating him from Head of Latin America to Head of the Americas (Ex-U.S.).
In this role, the firm said in a statement, Hernández will oversee operations in both Canada and Latin America, continuing to cover the region from Vanguard’s offices in Mexico City.
According to the company, the appointment builds on a career that has steadily gained prominence within the organization. Hernández joined Vanguard in 2017 to lead the firm’s business in Mexico and went on to assume responsibility for the broader Latin American business in 2021. During this period, Vanguard noted, he has strengthened the firm’s presence and relationships with institutional investors, intermediaries and clients across the region.
In addition, earlier this year Hernández took on responsibilities related to the distribution of UCITS products, assuming the role of Head of Global Distribution Outside Europe for these vehicles. “The confidence placed in him is nothing new,” Vanguard emphasized, noting that UCITS represent “one of the asset manager’s key global growth initiatives.”
Now, with the Canadian market also under his supervision, Hernández becomes one of the most influential figures within Vanguard’s international leadership structure. The move reflects the growing importance of the Americas to the asset manager, one of the largest investment firms in the world.
“It remains to be seen whether this commitment to an integrated continental vision will be accompanied by new expansion plans and a deeper engagement with investors across the region,” Vanguard added in its press release.
Amundi recently held its World Investment Forum 2026, titled “Age of Empires?”, where several leading figures from the worlds of economics and finance explored the major macro trends currently shaping the global landscape, as well as the investment opportunities they present.
The event opened with Valérie Baudson, CEO of Amundi, who shared her outlook for the coming year and discussed the firm’s strategic plan. Baudson highlighted the accelerating fragmentation of the multilateral order and the “evident” competition for critical resources, technological supremacy and the race to develop AI capabilities.
On the economic front, she pointed to the resilience of the global economy, which is becoming increasingly diversified; reaffirmed Europe’s resilience and the slowdown in U.S. growth; and noted the divergence within the Chinese economy. In this context, according to Baudson, “fiscal and monetary policy, both in developed and emerging markets, has become increasingly important,” while markets “continue to offer opportunities, provided you know where to look.”
As a result, “in the age of empires, geopolitics has regained primacy over economics.” The relationship between the United States and China will continue along a path of uneasy coexistence, but Europe “can act as a balancing force,” and as the world adapts to the energy crisis, “we are entering a new geoeconomic regime.”
Overall, Baudson believes the U.S. economy is likely to remain strong, although inflationary pressures will persist, “testing the monetary policy of the new Federal Reserve Chair.” In Europe, she expects growth to remain moderate this year, but over the longer term the agenda will revolve around “greater spending on defense and infrastructure, more resilient supply chains and progress in the energy transition.” Asia, meanwhile, will continue to display “multiple pillars of growth,” with Baudson highlighting China and India in particular, while paying special attention to countries dependent on oil and gas imports.
“Markets will adapt to this new reality while continuing to offer opportunities for investors. Artificial intelligence, which was once primarily a technological phenomenon, is now an energy phenomenon that is transforming the competitive landscape,” she said, adding that cybersecurity “will remain a risk we must keep firmly in mind, as will the cost of usage.”
Baudson also emphasized the “quiet but persistent questioning” of U.S. sovereign assets as a pillar of global stability. As “regional dynamics matter increasingly,” diversification “must also take into account currency, region and sector, as well as supply chain exposure and energy security.”
In this environment, Baudson said Amundi’s mission “is clear: to provide clients with resilient portfolios capable of capturing the transformative opportunities ahead.”
From a business perspective, the CEO detailed that retirement solutions and the digitalization of savings are the firm’s two priority growth drivers. To achieve this, Amundi has set two objectives: supporting new digital players and helping banks accelerate their digital transition, with the goal of doubling the number of digital partners by 2028.
Geographically, the firm is focusing on Asia, where it aims to reach €150 billion in investment inflows by 2028. It also plans to “significantly increase market share in Northern Europe, from the UK to Germany,” while noting that its strategic plan also calls for “a stronger presence in high-potential regions such as Latin America.”
According to Baudson, achieving these goals will require innovation in securitization. She highlighted the launch of the first tokenized money market fund and reaffirmed Amundi’s commitment to remaining a leader in responsible investing. She also referenced innovation in both passive and active ETFs, as well as the expansion of technology and digital services through Amundi Technology.
Janet Yellen
Following her opening remarks, Baudson held a conversation with Janet Yellen, former Chair of the Federal Reserve and former U.S. Treasury Secretary, who admitted that the most challenging period of her career was the phase of financial instability, during which she felt like a true “firefighter” dealing with problems created by an “unregulated shadow banking system.”
Yellen acknowledged that concerns about the energy shock “are dominant,” but said the Fed is monitoring inflation appropriately and does not expect an interest rate hike in the coming months, while the possibility of a rate cut has “virtually disappeared.”
She also stated that she had “never before seen threats to central bank independence that come close to those we have witnessed over the past year,” noting that central banks were granted independence so they could focus on price stability and resist pressure from elected political leaders seeking interest rate policies that help manage public debt. In the United States, she said, the interest burden has become “genuinely problematic.”
Regarding the labor market, Yellen said that those who understand AI best “are very optimistic about productivity gains,” but she also noted that productivity improvements often take time to materialize.
“Sometimes it can take decades. AI may move faster, but there could still be a lag,” she said.
Bullard and Trichet
James Bullard, former President of the Federal Reserve Bank of St. Louis, and Jean-Claude Trichet, former President of the European Central Bank, completed the lineup of prominent speakers at the forum, focusing on the evolving monetary order.
Bullard argued that governments appear reluctant to raise taxes or control spending, which in his view will eventually create “problems at some point in the future,” with implications for central bank independence.
“We are approaching an unfavorable policy mix similar to what we saw in the 1970s, when undisciplined governments and central banks, lacking a coherent plan and inflation targets, combined with extensive exchange-rate manipulation, generated substantial volatility and ultimately numerous recessions across many countries,” he said.
At the same time, he encouraged policymakers to “do everything possible” to promote technological progress and rising living standards, while avoiding political developments that “take us back to a past that did not work.”
Bullard also addressed central bank projections. While he described scenario analysis as “useful” and helpful in “visualizing possible paths, pricing markets and calculating returns under different conditions,” he emphasized its limitations and argued that assessing future risks requires collaboration between central banks and the private sector.
For his part, Trichet described Europe’s role in today’s fragmented geopolitical landscape as “very important.”
“Perhaps I am too optimistic, so I should be cautious,” he said, before noting that the four currencies issued by the major central banks of the advanced economies—the U.S. dollar, euro, yen and pound sterling—share the same definition of price stability.
“In my view, this is extremely important,” he said, arguing that since the explosion of retail finance, “this represents the most dramatic change in the international monetary system since the end of the modern era.”
“That makes me somewhat more optimistic about our ability, despite all the challenges, to preserve both price stability and financial stability,” Trichet concluded.
Amid a global environment marked by macroeconomic volatility, trade tensions and tighter financial conditions, Latin America remained attractive to investors and closed 2025 with double-digit growth in mergers and acquisitions (M&A) activity.
According to “Unlocking Potential: Latam M&A and PE Activity in FY 2025,” a report published by Marsh, the global leader in risk, reinsurance, capital, people, investments and management consulting, the total value of transactions involving Latin American assets reached $114.3 billion, representing a 16% increase compared with 2024. The number of transactions, however, declined slightly to 1,345 deals, reflecting a global trend toward larger and more complex transactions.
Brazil remained the region’s leading market, recording 850 transactions with an aggregate value of $55.1 billion. Mexico and Colombia completed the group of most active countries, supported by strategic infrastructure and energy deals that continue to attract international capital.
The primary driver of growth was the energy, mining and utilities sector, which generated $42.6 billion in transaction value, representing a 25% year-over-year increase. Rising energy demand linked to the expansion of artificial intelligence, data centers and the transition to cleaner energy sources fueled investor interest in renewable energy assets, power transmission and electrical grid infrastructure.
The largest transaction of the year was GE Vernova’s acquisition of the remaining 50% stake in Prolec in Mexico for $5.3 billion, underscoring the growing strategic importance of energy infrastructure across the region.
Private equity also experienced one of its strongest rebounds of the year. Private equity transactions totaled $19.8 billion, representing a 106% increase from 2024, although the number of deals declined to 189 transactions.
Activity was driven primarily by investments in infrastructure and renewable energy, including Actis and GIC’s acquisition of a controlling stake in Serena Energia for $2.8 billion, as well as the acquisition of Orygen in Peru.
The technology, media and telecommunications (TMT) sector also remained highly active. With 278 transactions, TMT was the most active segment by deal count, supported by consolidation among telecommunications operators and the need to accelerate investment in fiber-optic networks and 5G technologies.
Among the most notable transactions was Millicom’s acquisition of Telefónica’s Colombian subsidiary, highlighting the sector’s ongoing consolidation as operators seek greater scale to meet growing demand for digital services.
At the same time, the nearshoring trend continues to strengthen demand for logistics infrastructure and data centers, creating new opportunities across both the real estate and infrastructure sectors.
Despite this momentum, the market faces significant challenges. Inflationary pressures, shifting tariff policies and a more restrictive financing environment have widened valuation gaps between buyers and sellers, increasing the complexity of negotiations.
In response, investors and financial sponsors are increasingly turning to transactional risk transfer solutions such as Representations & Warranties (R&W) insurance to reduce uncertainty and facilitate deal completion.
Felipe Escallón, Head of Private Equity and M&A for Florida and Latin America at Marsh, noted that the region has remained resilient despite macroeconomic volatility and geopolitical and regulatory challenges.
“Investors and sponsors are increasingly relying on transactional risk solutions to reduce uncertainty, bridge valuation gaps and facilitate faster and more secure execution of cross-border transactions,” he said.
Looking ahead to 2026, expectations point to a continuation of the trends observed last year, with investment increasingly concentrated in renewable energy, power grids, infrastructure and telecommunications, alongside growing participation from private equity funds.
However, industry experts agree that access to capital alone will no longer be sufficient. The ability to structure transactions effectively and manage associated risks will be a critical factor in turning investment opportunities into successful deals.
Franklin Templeton has announced the completion of its acquisition of 250 Digital, an active cryptocurrency investment management firm led by digital asset industry veterans Christopher Perkins and Seth Ginns. According to the firm, the transaction includes 250 Digital’s investment team as well as all liquid cryptocurrency strategies previously managed by CoinFund. As part of the agreement, Franklin Templeton will invest in those strategies.
The completion of the acquisition reflects Franklin Templeton’s long-term commitment to building infrastructure within the digital asset ecosystem and its conviction in the technologies that, according to the firm, will shape the next generation of institutional investing.
Business Division
With the completion of the transaction, Franklin Templeton has formally established Franklin Crypto, its dedicated active digital asset management division. Perkins will serve as Head of Franklin Crypto, while Ginns will assume the role of Chief Investment Officer (CIO), working alongside Tony Pecore, a long-time digital asset investment specialist at Franklin Templeton. Franklin Crypto will report directly to Sandy Kaul, Franklin Templeton’s Head of Innovation.
Franklin Crypto will provide institutional investors with actively managed cryptocurrency strategies, combining the investment expertise of the former 250 Digital team with Franklin Templeton’s global distribution platform. The new division complements Franklin Templeton’s existing digital asset capabilities, which already include a fully dedicated team focused on fundamental research, active portfolio construction and institutional risk oversight.
Portfolios are undergoing a structural transformation. Investors now have broader and more efficient access to new asset classes—from private markets to digital assets—than ever before. This shift is redefining the investment opportunity set while increasing portfolio complexity. These are among the key conclusions of “Built to Last: How Bond ETFs Are Powering a Portfolio Evolution,” a study published by BlackRock.
The firm argues that the modern asset allocation framework is no longer “a simple balance between stocks and bonds, but a multidimensional architecture encompassing public and private exposures, liquid and illiquid strategies, and both traditional and alternative sources of potential returns.”
At the same time, investors are increasingly asking what can help maintain portfolio cohesion in this more complex environment. According to the report, fixed income “can no longer be viewed solely as a counterbalance to equity risk,” as its role has evolved significantly.
“Fixed income can simultaneously meet liquidity needs, support potential income generation, facilitate disciplined rebalancing and provide a mechanism for managing portfolio volatility across changing market environments,” the report states.
Modern fixed income through ETFs
This evolution in portfolio construction is occurring alongside a transformation within fixed income markets themselves. Once viewed as opaque, dealer-driven and operationally cumbersome, the bond market is becoming increasingly digitalized, transparent and indexable.
At the center of this modernization are fixed income ETFs.
According to the study, fixed income ETFs now represent more than $3 trillion in global assets, with $669 billion in inflows during 2025 alone—exceeding the combined total inflows recorded in 2022 and 2023.
Fixed income ETFs have effectively translated the scale and breadth of the bond market into investment exposures that are tradable, transparent and operationally efficient. What began as a tactical liquidity management tool has evolved into a strategic allocation vehicle used by institutions, financial advisors and wealth investors worldwide.
The report argues that fixed income ETFs sit at the intersection of two defining trends: growing portfolio complexity and the modernization of fixed income market structure.
On one side, portfolios are increasingly incorporating more illiquid, volatile and differentiated return streams. On the other, fixed income markets have become more transparent, indexable and technologically advanced.
Bond ETFs bridge these developments by providing “the scalable liquidity, income precision and execution efficiency required to support increasingly sophisticated portfolios.” As a result, fixed income ETFs are uniquely positioned to fulfill the expanded role that bonds can play in modern portfolio construction.
A stabilizer for portfolios exposed to digital assets
Digital assets have continued to grow as more investors allocate capital to the asset class.
Cryptocurrencies, for example, have experienced rapid expansion. According to BlackRock, the total cryptocurrency market capitalization currently stands at approximately $2.4 trillion, while exchange-traded products (ETPs) providing crypto exposure have grown from $4 billion to $120 billion in assets over just three years. Today, more than 300 crypto ETPs are listed globally.
Looking ahead, the report notes that more than 75% of institutional investors expect to increase their allocations to digital assets, while 59% plan to allocate more than 5% of their assets under management to cryptocurrencies.
Over the past five years, Bitcoin has exhibited a different performance profile from bonds, with a monthly correlation of 0.21 between Bitcoin and the Global Aggregate Bond Index, compared with a 0.43 correlation between global equities and Bitcoin.
“Balancing Bitcoin allocations with bond allocations can therefore help smooth overall portfolio performance across different market environments,” the report notes.
Fixed income ETFs can also help mitigate the impact of cryptocurrency market downturns “by providing diversified exposure across duration and credit risk through a broad range of bonds, while consolidating that exposure into a single vehicle to simplify investing and facilitate efficient rebalancing.”
When portfolio allocations drift from their targets, bond ETFs allow investors to adjust exposures quickly and cost-effectively without having to buy or sell individual bonds, making portfolio rebalancing more efficient and operationally straightforward.
In a global environment shaped by shifting geopolitical dynamics, technological disruption and the continued evolution of private markets, Morningstar Wealth’s conference—led by Morningstar Wealth President Daniel Needham—brought together leading voices from academia, asset management and investment strategy to discuss the forces reshaping portfolio construction in today’s investment landscape.
One of the event’s keynote conversations featured geopolitical analyst Walter Russell Mead of the Hudson Institute and The Wall Street Journal, who argued that today’s international environment should not be viewed as a complete rupture with the past, but rather as the evolution of deeper historical patterns.
Geopolitics: Historical continuity and new strategic tensions
Mead argued that U.S. foreign policy has displayed remarkable historical continuity, shaped by four enduring intellectual traditions—Hamiltonian, Wilsonian, Jeffersonian and Jacksonian—that continue to influence contemporary policymaking. From this perspective, today’s foreign policy debates are not anomalies but expressions of long-standing tensions within American strategic thought.
Regarding the Trump administration, Mead noted that its foreign policy reflects a blend of these traditions, particularly the tension between pragmatic isolationism and a more assertive nationalism, evident in issues such as Iran, immigration and America’s global role.
On China, Mead emphasized that while it represents the West’s principal long-term strategic challenge, the relationship does not necessarily have to culminate in inevitable conflict. In his view, the key will lie in Asia’s economic development and the creation of sustainable regional balances that reduce incentives for direct confrontation.
Technology and artificial intelligence: The new axis of political economy
One of the panel’s central themes was the impact of artificial intelligence and the technology sector on the restructuring of American capitalism. According to Mead, AI will not only transform productivity but also reshape the very structure of economic and political power.
Unlike traditional multinational corporations, many of today’s technology companies depend less on global supply chains and more on digital ecosystems, fundamentally changing their incentives with respect to trade and labor policies.
Mead cautioned that while automation across both the public and private sectors could deliver significant productivity gains, it may also lead to substantial labor displacement. The challenge, he argued, will be ensuring that the benefits of this transformation are broadly shared, preventing the emergence of new structural inequalities.
Artificial intelligence and financial advice: The enduring value of human judgment
In a later session, Morningstar CEO Kunal Kapoor discussed how artificial intelligence is transforming the financial advisory industry. His central message was clear: AI will not replace financial advisors, but it will raise expectations for the value they provide.
Kapoor argued that as automated tools increasingly answer basic questions and democratize access to financial information, advisors will differentiate themselves through judgment, context and personalized advice.
“The challenge is no longer answering questions—it is identifying what truly matters within a client’s financial situation,” was one of the key messages from his presentation.
Private and public markets: A structural convergence
Another major theme was the growing role of private markets in portfolio construction. Kapoor noted that companies are remaining private for longer, concentrating a larger share of value creation outside traditional public markets.
At the same time, instruments such as private credit and semi-liquid investment vehicles have expanded rapidly, offering institutional and sophisticated investors additional diversification opportunities. However, Kapoor stressed that these investments require a deeper assessment of liquidity, costs and transparency.
Active management: The case for long-term discipline
One of the conference’s most anticipated sessions featured Will Danoff, manager of Fidelity Contrafund, in conversation with Morningstar’s Robby Greengold.
Danoff emphasized that successful active management is rooted in rigorous research and the ability to identify sustainable competitive advantages. He credited Fidelity Investments’ extensive research platform with helping him develop a comprehensive understanding of the market.
He highlighted three core investment principles: maintaining a broad investment universe, identifying companies with exceptional leadership—often founder-led businesses—and allowing long-term winners to compound over time rather than reacting excessively to short-term market volatility.
Private credit versus public credit: Competition or complementarity?
Another panel brought together representatives from Blackstone, PIMCO, Cliffwater and Morningstar to discuss the evolution of credit markets in a higher interest rate environment.
The panel’s broad conclusion was that private and public credit should not be viewed as competing asset classes but rather as complementary tools within a diversified asset allocation strategy.
Private credit offers issuers greater flexibility and customized financing solutions, while public credit remains attractive because of its liquidity and efficient price discovery. In this environment, manager selection becomes increasingly important, particularly as the credit cycle matures and financial stress risks increase.
Hospitality, relationships and the human element in wealth management
One of the event’s most distinctive presentations came from entrepreneur and author Will Guidara, who introduced the concept of “unreasonable hospitality” to the world of financial advice.
Best known for his career in fine dining, Guidara argued that the wealth management industry often underestimates its fundamentally relationship-driven nature. In his view, in an increasingly automated world, genuine human connection has become both scarce and exceptionally valuable.
His philosophy rests on three principles: making human connection the primary differentiator, consistently exceeding client expectations and intentionally applying creativity to every client interaction.
An industry undergoing simultaneous transformation
Taken together, the discussions throughout the Morningstar conference reflected an industry experiencing profound structural change. The convergence of geopolitics, technology, private markets and evolving investor expectations is redefining not only how portfolios are constructed but also the role of advisors and investment managers.
Despite the diversity of perspectives across the panels, one overarching message emerged consistently: the future of investing will depend as much on understanding global macroeconomic and geopolitical forces as on integrating technology without losing the human judgment that has long been at the core of sound financial decision-making.
Institutional investors around the world are reshaping their investment strategies as three major megatrends—artificial intelligence (AI), the energy transition and deglobalization—continue to redefine the global economic landscape. According to Nuveen’s latest Global Institutional Investor Survey, these themes are having a profound impact on portfolio construction and long-term capital allocation.
The report shows that AI has become the single most influential investment theme, with 63% of institutional investors identifying it as the megatrend most likely to shape their investment decisions over the next five years. The energy transition ranks second at 40%, followed by deglobalization at 36%.
“Institutional investors are facing a defining moment shaped by three transformative megatrends: the AI revolution, the energy transition and the forces of deglobalization. These are not merely abstract concepts—they are driving real investment decisions. Institutions are investing heavily in AI infrastructure and energy production, adjusting regional exposures in response to trade disruptions and significantly increasing allocations to private markets. The common thread is that investors are taking decisive action to position portfolios for a new investment landscape,” said Harriet Steel, Global Head of Institutional Distribution at Nuveen.
Nearly every institution is investing in AI
The survey highlights an unprecedented level of institutional commitment to AI, with 96% of institutions actively investing in AI-related opportunities. In addition, 75% believe AI will generate a significant increase in economic productivity over the next decade.
Investors are allocating capital to cloud infrastructure, computing capacity and semiconductors, AI model development and software, as well as energy generation to support the technology’s rapid expansion. Among investors allocating capital to AI, 39% view energy production and infrastructure as the most attractive investment opportunity.
“Nearly every conversation we have with institutional investors includes a discussion about the many ways to position portfolios around AI. Over the past 12 months, we have seen not only broader recognition of AI’s transformative potential, but also a much more sophisticated approach to investing in it. Interest in cloud infrastructure and semiconductors remains strong, but investors are increasingly seeking more direct exposure to the energy generation and transmission assets needed to power this revolution,” Steel added.
The energy transition: from risk to opportunity
Institutional investors are also changing the way they approach energy and climate, shifting from a risk-management perspective toward an opportunity-driven investment strategy.
According to Steel, investors are increasingly seeking exposure to new forms of energy generation, particularly as energy demand continues to rise across multiple sectors globally.
“At Nuveen, this translates into tangible investment opportunities across both public and private markets—from utility companies positioned to benefit from faster earnings growth to private investments in clean energy infrastructure, energy storage and the construction of data centers that support AI growth,” she said.
One notable finding from the survey is that 64% of institutions agree that the expected surge in energy demand strengthens the investment case for clean energy. Energy innovation and infrastructure projects remain the top destination for capital among impact-focused investors.
Trade, tariffs and geopolitics reshape portfolios
Nearly all respondents (91%) made portfolio adjustments in 2025 in response to trade, tariff and geopolitical developments.
Among investors reallocating capital geographically, more than one-third (36%) increased their exposure to Europe, reflecting a strategic effort to diversify amid rising uncertainty.
Among those shifting sector allocations, the most frequently cited areas included AI-related technologies (cloud computing, machine learning and industrial automation), alternative credit and private equity, cryptocurrencies, blockchain technology and digital assets, energy (including renewables, semiconductors and utilities), cybersecurity and healthcare (biotechnology, pharmaceuticals and life sciences).
While 74% of respondents believe that 2025 has been more positive than negative for their portfolios, nearly half (44%) expect the unprecedented tariff and trade measures introduced this year to have lasting implications for investment strategy.
Looking ahead, 48% of investors expect the dominance of U.S. capital markets to diminish over the next decade.
Views on interest rates remain divided. Nearly half (47%) expect the Federal Reserve to implement gradual, steady rate cuts that would support financial markets, while 32% anticipate an uneven or unpredictable easing cycle that could increase market volatility. Another 12% expect rate cuts to be paused or delayed because of renewed inflation, while 8% foresee a faster pace of easing amid concerns over a sharper economic slowdown.
Accelerating allocations to private markets
Approximately 81% of institutional investors plan to increase their allocations to private markets over the next five years, with more than half (51%) expecting to raise those allocations by between five and fifteen percentage points.
Private infrastructure, corporate credit and private equity are the leading alternative investment priorities over the next two years. Forty-three percent of institutions plan to increase allocations to private infrastructure and corporate credit, closely followed by private equity (42%).
“The scale and pace of institutional capital flowing into private markets remain significant. Institutional investors continue to capitalize on the powerful combination of benefits offered by private markets: diversification away from public market uncertainty, enhanced income generation and the potential to improve risk-adjusted returns. As new technologies make it easier to integrate private market investments into existing portfolios, we expect this structural shift to accelerate, particularly as investors seek resilience in an environment of persistent volatility,” Steel concluded.
Although diversification remains one of the key advantages of private markets, nearly half (46%) of institutions identified diversifying their alternative credit allocations as a top priority over the next five years.
The preferred segments within private fixed income include investment-grade private companies (44%), investment-grade private infrastructure debt (44%) and private asset-backed securities (ABS) (40%).
In addition, nearly half of investors (46%) plan to add one or two new types of alternative credit investments over the next two years, while 15% expect to add three or more.
Beyond expanding diversification within private markets, investors are also looking beyond developed economies. Among those planning to increase allocations to below-investment-grade public fixed income, 48% intend to raise exposure to emerging market debt, compared with 27% a year earlier.
