Brazil Shelves Digital Currency—for Now

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Brazil Shelves Digital Currency—For Now, but Private Sector Drives Tokenization Forward

The token is the cornerstone of the innovation transforming Brazil’s digital economy: it is a digital representation of an asset—such as money, stocks, securities, real estate, or even loans—recorded on a blockchain system.

The topic is not new: the Central Bank of Brazil has been working on a token (called Drex, the country’s first CBDC—Central Bank Digital Currency—and one of the first in the world) and on building its own blockchain for the economy. Since the token acts as a “digital certificate” proving ownership or rights over a specific asset, the local market has been preparing for its arrival.

The advantages are significant: greater liquidity (as it can be traded in real time, fractionally, and globally), enhanced security (thanks to blockchain immutability), and lower operating costs through automated and traceable processes.

In this context, the relationship between blockchain and tokens is central: blockchain is the technological infrastructure that ensures the recording and transfer of tokens, guaranteeing no duplication or fraud. Drex would be Brazil’s official token, backed by the real, with instant settlement and programmability—features that would allow for automated payments, cost reductions, and integration of the traditional financial system into the new digital economy.

Tokenization begins to take root in Brazil as a tool to expand access and reduce operating costs in financial markets

Brazil’s (Ex?) Digital Currency
However, there has been a setback from the public sector. After two phases (which involved several banks and consortia), the Drex project was rolled back and will now launch in 2026, in an initial version without blockchain, focused on infrastructure for reconciling credit liens—that is, systems to centralize records and legal restrictions affecting assets used as collateral in financial operations.

The original goal was to create a public digital currency backed by the real, with instant settlement, traceability, and programmability. Drex was also envisioned as a key piece in integrating the traditional financial system with a new blockchain-based digital infrastructure. The institution stated that the more ambitious scope of the project remains under development.

Still, this pause did not stall the private sector. On the contrary, the delay in Drex opened the door for private initiatives to accelerate. Platforms like Nexa Finance are expanding real asset tokenization solutions, exploring the liquidity and efficiency potential of these instruments—from real estate to agricultural credit—while institutional investors and banks such as Bradesco invest in digital assets, promoting regulatory discussions and awaiting authorization to incorporate more assets into the system. Tokenization is beginning to establish itself in Brazil as a tool to broaden access and reduce operating costs in the financial market.

Platforms like Nexa Finance expand real asset tokenization solutions, from real estate to agricultural credit
Bradesco builds a Digital Assets division with institutional focus

The shift in Drex’s direction has not dampened market enthusiasm. According to Courtnay Guimarães, Head of Digital Assets at Bradesco, the sector continues to move forward independently: “We are building our market presence. A new network may be forming within the main Brazilian market association. There are several international initiatives. There are independent tokenization players. The future is still very uncertain and evolving. But the market is quite advanced; it hasn’t given up on this story,” he stated.

Guimarães explained that the bank is creating a digital assets division aimed at institutional and high-net-worth clients. “With very strong guidance focused on corporate clients and wealth segments, such as private banking and business clients,” he added.

Currently, the bank is indirectly involved with digital financial products, such as feeders that invest in tokenized structures abroad, as in the case of a Bitcoin ETF distributed by the institution.

In this case, the ETF, managed by Hashdex—Brazil’s largest crypto asset manager—contains shares backed by tokens representing fractions of real bitcoins, held in a secure environment. This way, investors do not need to purchase the asset directly or manage digital wallets: they buy shares of a listed fund, and each share corresponds to a fraction of tokens that reflect Bitcoin’s price.

Bradesco’s plan, however, is more ambitious. The bank intends to offer “exposure to real assets,” such as tokenized receivables and digital securities.

Focus on Stablecoins

Citing a study by Brazil’s Federal Revenue Service, a key point in the local digital economy is the growing use of stablecoins—cryptocurrencies pegged to fiat currencies such as the dollar. The report highlights USDC, issued by Circle, as an example: a token that represents one U.S. dollar, widely used for international payments due to its immediate liquidity and low cost.

This effect is not coincidental: this year, the Brazilian tax authority raised the rate of the IOF (Tax on Financial Transactions). The tax applies to international transactions and purchases. This move, as confirmed by the data, has encouraged the use of stablecoins for payments and capital movements.

Regarding regulation, Guimarães explained that the local token market currently operates under a resolution originally designed to regulate equity crowdfunding, but which has been adapted for digital asset issuance. The expectation is for a new regulation that will allow funds to scale up the use of tokens.

Bradesco aims to offer “exposure to real assets,” such as tokenized receivables and digital securities

Former Patria executives launch tokenization model with radical customization

Using blockchain to allow each investor or advisor to assemble personalized tokenized products in real time: this is the proposal of Nexa Finance, founded in March 2024 by Eduardo Furuie and Lucas Danicek, former executives at Patria Investimentos and founders of the family office Terra Capital.

The company has already structured over 200 tokenized issuances, focusing on real credit assets such as credit card receivables, consortium shares, and Bank Credit Notes (CCBs).

The differentiator is customization. Through smart contracts—self-executing programs that run on blockchain and automatically enforce pre-agreed terms—the platform allows tailored investments to be built in just minutes, with contributions starting from 100 reais. This automation ensures traceability, fractional liquidity, and transparent governance.

According to the founders, the solution is attracting family offices and credit managers, and will soon target pension funds and insurers. The promise is to match assets and liabilities precisely, avoiding cash flow mismatches.

For Danicek, tokenization is about to completely reshape the financial market. “The token is the only financial instrument that allows you to package any asset, with near-zero marginal cost, full interoperability, and programmability. It’s the ideal layer for AI agents to operate on. No player will be able to compete without this.”

Despite the pause in Drex, private players continue to advance with concrete proposals. As Danicek concluded, tokenization is likely to follow the same path as digital banking: “Imagine a bank today without an app. That bank would no longer exist. Tokenization will follow the same trajectory.”

Citi Wealth Appoints Juan Andrés Althabe as Director in New York

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Citi Wealth appoints Juan Andrés Althabe as Director of the Global Family Office Group in New York

“I’m very excited to announce that Juan Andrés Althabe is joining the Global Family Office Group at Citi Wealth, where he will help drive our Latin America coverage. He will be based in New York,” wrote Richard Weintraub, Global Family Office Group, Head of the Americas at Citi Wealth, on his LinkedIn profile.

“Citi has been deeply rooted in Latin America for more than a century, serving generations of families and institutions across the region, and Juan’s expertise and knowledge of the family office landscape—together with our incredible LATAM team—will be key to expanding and strengthening that legacy,” Weintraub added, before inviting fellow users of the social network to join him in welcoming the new hire to the U.S. bank.

“Excited to join Citi Wealth’s Global Family Office Group,” wrote Juan Andrés Althabe on his own LinkedIn profile. According to his post, he is joining “to help strengthen our coverage in LATAM.”

In June 2015, Althabe founded 7 North Finance Global Services in New York. In 2023, he held the position of Managing Director at Keyway, and prior to that, held the same role at GBS Finance. Previously, he spent more than six years at JPMorgan Chase.

He holds a degree in Economics from the Universidad Católica del Uruguay, is a Certified Investment Management Analyst (CIMA), and holds FINRA Series 7 and Series 63 licenses, according to his LinkedIn profile.

JP Morgan AM Anticipates That Europe Will Outpace the United States in Growth Over the Next Decade

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JP Morgan AM anticipates that Europe will outpace the United States in growth over the next decade

“It has been a good year for risk assets and another demonstration that staying invested long-term eventually pays off,” summarized Lucía Gutiérrez-Mellado, Head of Strategy for JP Morgan Asset Management in Spain and Portugal, during the press breakfast where the firm presented its market outlook for the final quarter of 2025 and its projections for 2026.

During the event, the firm also commented on the publication of its new Long-Term Capital Market Assumptions report, a document in which it analyzes long-term forecasts. According to the study, European equities are expected to deliver an 8.5% return over the next decade, compared to 6.7% forecast for the United States and 7.2% for emerging markets.

“The growth differential between regions is significant and supports our more constructive outlook on Europe,” Gutiérrez-Mellado emphasized. She pointed out that the continent is undergoing an economic mindset shift, with increased investment in defense, infrastructure, and energy transition.

A positive year for markets, despite uncertainty


Despite 2025 being marked by uncertainty stemming from tariffs and global slowdown, the Strategy Director described the year as “surprisingly solid” for risk assets.

Emerging markets outperformed developed ones, the growth style beat value, and Japan stood out as one of the year’s top performers thanks to export momentum. Europe, by contrast, lost some traction compared to Asia and the U.S., where expectations of rate cuts by the Federal Reserve boosted investor confidence.

“It has been another year that proves selling at the worst moments is usually a mistake. Those who stayed invested have recovered their losses and are now gaining even more.” Gutiérrez-Mellado stressed the importance of maintaining global and diversified portfolios, noting that even after sharp declines, a balanced strategy tends to outperform cash over one- to three-year horizons.

Europe: more constructive, but with caveats


The firm believes Europe is at a turning point after years of weaker growth compared to the U.S. The continent “is changing its economic philosophy,” driven by a more active fiscal policy, the still-pending use of Next Generation EU funds, and increased spending on defense and energy.

However, the firm warns that the region remains exposed to risks such as a strong euro and global trade tensions.

In addition, the savings accumulated by European households in recent years could become an extra driver of consumption. “Unlike in the United States, European families were more cautious during the energy crisis,” the expert noted.

United States: solid earnings, but ‘not everything goes’


The U.S. economy is showing signs of moderation. Inflation hovers around 3%, the labor market is cooling slightly, and the Fed has begun a rate-cutting cycle after a nine-month pause. The firm expects two additional cuts before year-end, which would ease financial conditions and support consumption and small businesses.

On the corporate front, “companies have delivered positive surprises, demonstrating strong adaptability and efficiency.” In fact, the U.S. has recorded nine consecutive quarters of earnings growth, three of them above 10%.

However, in the expert’s view, the period of absolute dominance by the U.S. market may be peaking: “We remain exposed to the U.S., but we are more selective and believe other regions will offer better opportunities in the coming years,” she added. Currently, the firm maintains a neutral stance between the U.S. and Europe within its global portfolios.

China and emerging markets: two speeds, one opportunity


Regarding China, the country’s economy is “moving at two speeds”: while the real estate crisis and weak consumption persist, the technology and artificial intelligence sectors have seen rapid growth. “China’s technological leadership is undeniable and will be one of the main points of contention with the United States over the next decade.”

“Regional diversity is no longer a luxury, it’s a necessity,” said the expert, highlighting the importance of global portfolios that combine exposure to both developed and emerging markets.

Strategy: slight overweight in equities and active management


As for current positioning, the firm maintains a slight overweight in equities compared to fixed income. “The environment remains constructive for risk assets, although we maintain duration in portfolios in case growth disappoints,” she explained. Following spread compression, the firm has reduced its overweight in credit and maintains tactical exposure to sovereign debt.

By sector, JP Morgan AM shows a preference for high-quality technology, healthcare, and renewable energy—segments with structural growth potential. In commodities, the firm manages exposure in a diversified manner across both precious and industrial metals, while maintaining a neutral view on the dollar, with a medium-term expectation of slight depreciation.

StoneX International Securities Appoints Everardo Vidaurri as CEO

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Stonex International Securities appoints Everardo Vidaurri as its new CEO based in Miami, according to a post by the appointee on LinkedIn.

“I’m pleased to share that I’m starting a new position as CEO at Stonex International Securities!” wrote Vidaurri on the social network that connects professionals.

Stonex acquired the wealth management units of Intercam in the United States—namely Intercam Advisors and Intercam Securities—after having announced its intent to purchase last June. The transaction is part of Stonex’s expansion strategy in wealth management in Latin America, which will allow the company to offer clients in the region greater access to markets and investment products.

The acquisition of Intercam “fits perfectly with Stonex’s strategy to expand its global presence in wealth management, especially in Latin America, and to provide clients with broader access to markets and investment products,” stated Jay Carter, executive director of Stonex Wealth Management, when the firm announced its purchase intentions.

Stonex Wealth Management oversees more than $18 billion in client assets in the United States and Latin America, according to information released by the company. With more than 500 financial professionals operating in 44 states, the firm offers financial solutions for individuals, families, and businesses, with a full range of financial planning services, investment advisory, and brokerage tailored to clients’ needs.

Since October 2009, Vidaurri had served as CEO at Intercam Securities, while for the six years prior he was VP at BNP Paribas, according to his own profile on LinkedIn.

Insigneo Acquires the Accounts of VectorGlobal WMG

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Photo courtesySource: Insigneo's Web

At a time when Mexico’s Vector Casa de Bolsa is undergoing a process of dismantling—after the U.S. Department of the Treasury accused it, along with CI Banco and Intercam, of facilitating money laundering—the international arm of the firm, VectorGlobal Wealth Management Group, has come under new ownership. The buyer: U.S.-based financial advisory group Insigneo Financial Group, which with this acquisition strengthens its foothold in Latin America.

According to a statement issued by the wealth management firm, the agreement includes the client accounts of VectorGlobal WMG and the RIA they have in Miami, called VectorGlobal IAG.

Thus, the transaction includes the transfer of more than $4 billion in client assets from across the continent, including Colombia, Chile, Mexico, Ecuador, Peru, Venezuela, the United States, and Canada. This will allow the firm to establish a stronger position in the region, reaching total assets under management of approximately $35 billion.

In addition, the transaction includes a three-year referral agreement between Insigneo and Casa de Bolsa Finamex for the referral and servicing of the latter’s offshore client accounts, recently acquired from Vector Casa de Bolsa.

Around 80 Professionals and Executives Join Insigneo
But the acquisition doesn’t only involve the assets: approximately 80 investment professionals and key executives from Vector will be considered to join Insigneo‘s team once the agreement is signed, according to the details provided.

“This transaction represents a significant milestone in the execution of Insigneo’s growth strategy,” stated Raúl Henríquez, CEO and Chairman of the Board of the acquiring firm. “This acquisition will allow us to reinforce and expand our geographic presence, strengthen our team to better serve our clients, and reaffirm our firm’s commitment to Latin America,” he added in the press release.

Looking ahead, the transaction is pending regulatory approval, but it is expected to be fully closed in the first quarter of 2026.

This is the third major transaction the firm has carried out in a few years, having acquired the international businesses of Citi in Puerto Rico and Uruguay in 2022, and integrated the offshore accounts of PNC for Mexican clients in 2023.

All in all, the U.S.-based financial advisory firm has 280 investment professionals and 68 institutional firms in its network, serving a total of more than 32,000 clients in various countries.

Patria Closes the Largest Infrastructure Fund in Latin America

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Latin American Giant Patria Investments Closes Its Fifth Infrastructure Fund, Making It the Largest Vehicle of Its Kind in the Region

The Latin American alternative investment giant Patria Investments announced the closing of its fifth infrastructure fund, making it the largest vehicle of that asset class in the region. With a diversified portfolio — both in terms of countries and sectors — the Brazilian-headquartered firm continues to strengthen its commitment to real assets in Latin America.

This new fund, called Patria Infrastructure Fund V, according to a statement released by the firm, raised $2.9 billion, including capital commitments and vehicles related to the investment program. According to data from Preqin and Infrastructure Investor, this makes it the largest vehicle dedicated to infrastructure investment in Latin America.

The strategy, the firm explained, is well diversified across the region, with a strong presence in Brazil, Colombia, and Chile. At the sector level, the portfolio focuses on strategic areas, including toll roads, data centers, water desalination plants, renewable energy, and electric mobility.

As part of its closing, Patria’s fifth infrastructure fund attracted commitments from both new and returning investors, including sovereign wealth funds, pension funds, asset managers, insurance companies, and development finance institutions.

Moreover, the vehicle has already completed some investments and co-investments in Chile, Colombia, and Brazil. Additional commitments are anticipated in the coming months within Fund V’s portfolio.

“Patria’s deep expertise in the region’s sectors strongly positions us as a local gateway for investors,” said Felipe Pinto, Managing Partner and Head of Infrastructure Development Funds at the firm, adding that the investment house “has managed to create solutions by leveraging the inherent benefits of real assets” across Latin America.

Key Spaces in the Asset Class

According to Patria, its team has identified a “relevant and attractive” market in Latin American infrastructure, valued at over $90 billion for the next 5 to 7 years across its key operational sectors. This includes recurring investment theses such as highways and renewable energy, as well as emerging secular trends such as electric mobility and the sectors of sanitation and waste management.

The strategy envisions growth coming from renewable projects and initiatives tied to the energy transition. Meanwhile, opportunities in logistics and transportation will be driven by new highway concessions, commodity logistics, and urban mobility projects.

In addition, the expansion of data centers and 5G networks will continue to create opportunities within the digital infrastructure space, while the waste management sectors and the privatization of sanitation assets will help drive opportunities within environmental services.

“We anticipate continued growth, both in terms of client demand and investment opportunities, in the Latin American infrastructure market,” emphasized Andre Sales, Managing Partner and CEO of Patria Infrastructure, “driven by the persistent need for private capital in local infrastructure and the evolution of local capital markets.”

The New Challenge for Asset Managers: Competing Internationally Without Multiplying Costs

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market ahead of Argentina elections
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In an environment where international expansion demands complex structures and high regulatory costs, asset managers are seeking more agile ways to scale their strategies. Asset securitization, especially through listed and Euroclearable exchange-traded products (ETPs), has become an effective way to compete internationally without replicating corporate infrastructures across multiple jurisdictions, according to FlexFunds.

Launching a conventional investment fund involves establishing local management entities, complying with diverse regulatory frameworks, and undergoing lengthy registration and distribution processes. These requirements can take months and consume legal, tax, and operational resources that erode profitability.

Furthermore, custodian banks and institutional platforms require products with full operational compatibility — ISINs, automated reconciliations, standardized reporting, and recurring audits. When a vehicle does not meet these standards, its integration into private banking or wealth management networks becomes slow and costly.

Securitization and ETPs: A modern distribution architecture

Through securitization, a managed strategy is converted into a structured vehicle with an ISIN and international custody (Euroclear / Clearstream), without the manager losing control of the portfolio. This format enables the repackaging of specialized strategies — such as private credit, real estate, fixed income, or alternative assets — into instruments that are easily integrated into institutional systems, reducing entry barriers and improving transparency.

The III Annual Report of the Asset Securitization Sector 2025 – 2026, prepared by FlexFunds in collaboration with Funds Society, highlights the role of Ireland as a preferred jurisdiction for structuring securitized ETPs. Thanks to its Section 110 of the Taxes Consolidation Act, supervision by the Central Bank of Ireland, and connectivity with Euroclear, the country offers a robust and internationally recognized infrastructure.

FlexFunds’ ETPs leverage this framework by being structured through Irish Special Purpose Vehicles (SPVs), which combine tax efficiency, operational standardization, and global distribution. According to the report, over 70% of surveyed managers view this model as a key tool for internationalization, citing its low operational cost and fast launch timeline — 6 to 8 weeks, compared to several months for a conventional fund.

Additionally, the Irish SPV Report Q2-2025 confirms Ireland’s leadership in this field, with 3,724 active SPVs and total assets of €1.18 trillion, driven by structured debt vehicles such as CLOs and private securitizations. Financial Vehicle Corporations (FVCs) hold €689 billion in assets, while Other SPEs total €490.7 billion, reflecting the maturity of Ireland’s securitization ecosystem.

The growth of the securitized model is occurring alongside the record expansion of the global ETP market. According to ETFGI’s September 2025 report, assets under management in ETFs and ETPs reached $18.81 trillion, the highest level on record. This increase reflects a sustained trend towards institutionalization and standardization of listed structures, driving demand for efficient, transparent, and easily distributed products.

Advantages of ETPs for asset managers

  • International scalability: Access multiple jurisdictions without creating new subsidiaries.
  • Efficiency and speed: Standardized structures allow launches within weeks.
  • Institutional compatibility: ISINs and international custody ease integration with banks and platforms.
  • Control retention: Managers maintain decision-making over assets and risks.
  • Transparency and credibility: Independent valuation, auditing, and reporting enhance investor confidence.

The report by FlexFunds and Funds Society highlights securitization as a lever for innovation and diversification, particularly for strategies seeking institutional capital without losing operational flexibility.

Securitization has evolved into a strategic tool enabling portfolio managers to expand their global reach with efficiency and control. Far from being a product reserved for large institutions, these investment vehicles now offer a practical, regulated, and competitive path for internationalizing portfolios, improving governance, and connecting with investors worldwide.

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

Brookfield to Acquire Remaining 26% of Oaktree for Approximately 3 Billion Dollars

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Brookfield to Acquire Remaining 26% of Oaktree Capital Management for $3 Billion

Brookfield has announced that it will acquire the remaining 26% of Oaktree Capital Management that it does not yet own for approximately 3 billion dollars, enabling it to take full ownership of the Los Angeles–based firm specializing in credit and distressed debt. The deal will also strengthen Brookfield’s position as a major force in the alternative credit space, according to a Bloomberg report.

The agreement, which values Oaktree at around 11.5 billion dollars, is set to close early next year and will contribute to Brookfield’s revenue. The company first acquired a majority stake in Oaktree six years ago, accelerating the growth of its credit business, which has since become one of its fastest-growing divisions. Once the transaction is completed, the United States will become Brookfield’s largest market, representing more than half of its 550 billion dollars in assets and revenue.

CEO Statements and Strategic Vision

Following the announcement, Brookfield CEO Bruce Flatt stated:
“When we partnered with Oaktree six years ago, we joined forces with one of the most respected credit investors in the world, and the results have exceeded our expectations. Our partnership has created significant value for both companies. It has fueled the rapid expansion of our private credit platform, supported the growth of our wealth solutions business, and contributed to a 75% increase in Oaktree’s assets under management. Taking this next step will allow us to expand our credit franchise, enhance collaboration across our businesses, and strengthen our ability to continue delivering long-term value to our investors.”

Howard Marks, Co-Chairman of Oaktree, commented:
“Our partnership with Brookfield has been a great success, built on shared values of disciplined investing, long-term thinking, and integrity. Together, we have proven our ability to work seamlessly and deliver the best of both firms to our clients. Becoming a full part of Brookfield is a natural evolution that will allow Oaktree to continue thriving as part of one of the world’s leading investment organizations. With this closer alignment, Oaktree will remain central to Brookfield’s credit strategy, and we see significant opportunities to grow the franchise and expand what we can offer together to our clients.”

Transaction Terms

According to the proposed terms, Brookfield Asset Management Ltd. (BAM) and Brookfield Corporation (BN) will acquire all remaining equity interests in Oaktree for a total consideration of approximately 3 billion dollars. Under the terms of the transaction, Oaktree shareholders will have the option to receive a cash consideration, shares of BAM, or, subject to certain limitations, shares of BN.

The BAM and BN shares issued as consideration will be subject to sale restrictions of two and five years, respectively. This structure provides Oaktree holders the opportunity to participate in the future growth and earnings of the combined business while further enhancing long-term alignment.

Both BAM and BN intend to repurchase an amount of their own shares equivalent to those issued under the transaction. These repurchases will be conducted in the open market or, in BAM’s case and subject to regulatory approvals, from BN, which has agreed to make such shares available. This ensures that the transaction will have minimal or no dilutive impact on current BAM and BN shareholders.

The deal marks a significant increase in Oaktree’s valuation, as its assets under management have grown by 75% since Brookfield’s initial investment. It also follows a broader wave of consolidation among alternative asset managers, including BlackRock’s acquisition of Global Infrastructure Partners for 12.5 billion dollars.

The Industry Confirms Its Formula for Growth: ETFs, Private Markets, Retail, and Pensions

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In 2024, assets under management reached a record 135 trillion dollars, representing a 13% year-over-year increase. However, according to the latest report by Morgan Stanley and Oliver Wyman, by 2029, global assets in the asset management industry could reach 200 trillion dollars, implying an annual growth rate of around 8% and a cumulative increase of 48%. In addition, they estimate that average annual net flows will be around 2.7% through 2029.

These projections are based on the assumption that markets will maintain strong performance and that we are in an environment with lower interest rates, which are redirecting funds from guaranteed deposits back into capital markets. They also consider a context in which there is an ongoing shift from collective pension plans (defined benefit) to individualized retirement plans (defined contribution). All of this, they argue, could further sustain flows in the future.

Passive Management and Private Markets

In this global overview of what asset growth will look like, the report identifies several trends that will shape the evolution of the industry and asset managers’ business models. First, it notes that, for the first time globally, passive equity will surpass active equity. “Passive equity management continues to expand, especially in established markets like U.S. retail and in underpenetrated regions such as Europe and Asia-Pacific. In contrast, active equity funds are facing persistent outflows at the industry level, sustained only by a few managers delivering top-quartile performance,” the report states.

Notably, the fixed income segment shows a similar trend: “Although passive fixed income assets are expected to grow twice as fast as active assets, they will remain a relatively small segment of the market by 2029.”

Regarding Private Markets, the report considers that we are currently in a “plateau” phase following the boom from 2019 to 2022 and the stagnation of 2024. “This plateau masks a growing disparity between leading firms and smaller players. The top 10 private asset funds by assets captured 14% of fundraising in 2024, compared to 10% in 2020, a figure that rises to 48% and 58% of the capital raised in 2024 for private debt and infrastructure, respectively,” the report notes.

Their interpretation is that larger firms, benefiting from proprietary capital and deal generation, continue to outperform their competitors, securing the bulk of new capital flows and charging premium fees. “Smaller managers face fundraising challenges and often compete by offering fee discounts—a divide that is likely to intensify as wealth distribution channels (where most of the growth is expected) increasingly favor larger and more recognized brands,” they argue. Looking ahead, however, they expect significant growth across all private markets, driven by their increasing penetration into retail client portfolios.

Growth Drivers

Regionally, the report identifies Asia-Pacific as standing out for its higher organic net flows into both retail and institutional markets, particularly in China. It explains that, despite recent slowdowns, a significant portion of household wealth remains in low-yield deposits, highlighting untapped potential—especially in Japan.

In addition, global retail channels are projected to grow at twice the rate of institutional segments, which are experiencing net outflows except in certain niches such as general insurance accounts and some defined benefit pension markets (e.g., Japan, Australia). “Asset growth in Europe is expected to benefit from regulatory efforts encouraging retail participation and from the ongoing shift toward individualized retirement plans, through new vehicles and incentives (France, Germany) or mandatory auto-enrollment in defined contribution plans (United Kingdom),” the report states.

In this context, asset managers have found a path to continued growth, specifically through solution-based offerings. “These are becoming a key growth area, with the segment expected to expand at an annual rate of 11% through 2029,” the report notes.

The document explains that asset managers are increasingly adopting solutions in the form of model portfolios, sub-advisory mandates, and retirement-focused products to differentiate themselves. According to the analysis, this growth is being driven by rising demand for retail retirement investment products (e.g., target-date funds, target-maturity funds, decumulation products), with average organic growth over the past three years of 12% in APAC, 15% in Europe, and 7% in the Americas, as well as by the expansion of institutional solutions in the Americas, particularly outsourced chief investment officer (OCIO) mandates, which have grown organically by 7% since 2021.

Margins and Business Sustainability

In terms of revenue, the report concludes that the asset management industry will generate more than 650 billion dollars by 2029, in line with the estimate that assets will grow at an annual rate of around 8%. According to the report, alternatives are expected to claim an increasingly larger share, representing 44% of total revenue, while the share of active equity and fixed income funds declines.

This positive news is accompanied by a very clear warning: fee compression persists, though it is being offset by the shift toward higher-margin private markets and retail growth. “Asset managers’ operating margins improved in 2024, particularly among alternatives, which reached a record 51%. However, traditional managers continue to face structural profitability challenges amid ongoing fee pressure and cost-control demands—especially those using hybrid operating models (combining traditional and alternative asset management) who struggle to efficiently integrate distribution and product development,” the report concludes.

Finally, the report notes that, in this growth context, asset managers must address four themes that are reshaping the industry and present both challenges and opportunities.

First, leaders are facing increasing pressure to demonstrate value for money in Europe and APAC. Second, they must organize their product and distribution forces to serve a growing retail market that increasingly demands institutional-quality coverage. Third, they need to deploy operating models capable of blurring liquidity boundaries to address the burgeoning semiliquid product space. Finally, they must think beyond the active/passive dichotomy and build investment engines suited to address the full spectrum of tracking error.

The Market Ahead of Pivotal Elections in Argentina

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The Spotlight Is More Than Ever on Argentina


The government led by Javier Milei heads into the midterm elections this Sunday, October 26, in a completely unprecedented situation: with the United States Treasury committed to providing financial assistance to the country of up to 40 billion dollars, intervening in the foreign exchange market to calm volatility, and promising trade agreements.

The U.S. aid became effective after the ruling party lost by 13 points in the early September elections in the province of Buenos Aires, which accounts for nearly 40% of the national electorate. Therefore, these upcoming national legislative elections will be key for the government, which needs to expand its parliamentary representation and build consensus with the opposition to pass structural reforms.

Funds Society consulted with experts from international asset managers. Most agreed that the U.S. economic rescue is a temporary relief rather than a structural solution and that it is not enough to define a credible medium-term investment framework. They also pointed out that after October 26, the exchange rate should float and that the country should accelerate the pace of reserve accumulation.

WSJ and FT: Critical Editorials


Under the suggestive title “Argentina: Right Country, Wrong Bailout,” the Wall Street Journal stated in an editorial that “dollarization is the right and now essential political alternative” for the South American country, after warning that “this bailout is likely to throw good dollars after bad pesos without monetary reform in Buenos Aires.”

The paper also emphasized that “no one is sure how long this era of reforms will last” and mentioned that Economy Minister Luis Caputo “is opposed, as are some funds that benefit from a currency carry trade that would disappear with dollarization.” The conclusion was damning: “The default remedy is always devaluation” for Argentina.

According to the WSJ, “after the elections, Scott Bessent will waste dollar assets on this bailout if he doesn’t pressure Milei to restore sound money through dollarization.”

The Financial Times also published a harsh editorial, describing the partnership between Bessent and Milei as a “risky venture,” suggesting that the U.S. official “should understand the madness of defending” the current dual-band exchange rate system in Argentina, and stating that the U.S. is “throwing money at a serial defaulter” that even threatens competition with soybean producers.

“If madness is repeating the same action and expecting a different result, then a central pillar of Argentina’s economic policy borders on insanity,” the British newspaper wrote. The South American country needs “less anarchy and more capitalism,” the article concluded, referencing the Argentine president’s self-description as an anarcho-capitalist.

The View of International Asset Managers


On October 9, the U.S. Treasury confirmed direct purchases of Argentine pesos and a 20-billion-dollar swap framework with the Central Bank of Argentina. Interventions in the foreign exchange market continued, and on October 15, Bessent said he was in talks with banks to coordinate a debt facility of 20 billion dollars (in addition to the swap), raising potential support to 40 billion dollars. The institutions involved would be JP Morgan, Bank of America, Goldman Sachs, and Citigroup, according to media reports.

“The size and scope of the U.S. Treasury’s financial assistance program are remarkable, but its legitimacy will depend on Milei maintaining veto power in the upcoming midterm elections,” assessed Jason DeVito, senior portfolio manager of emerging markets debt at Federated Hermes.

According to DeVito, if the result is favorable to the government, “we will see momentum toward further deregulation and additional fiscal discipline.” In that scenario, Federated Hermes expects a move toward a more flexible exchange rate and an improvement in current account indicators.

Carlos Carranza, senior manager of emerging markets debt funds at M&G Investments, pointed out that after the elections, volatility will likely decrease “as the focus returns to fundamentals.”

The expert logically noted that President Milei will remain in office for at least two more years, “regardless of the electoral outcome. Meanwhile, it is worth noting that Argentina’s macroeconomic outlook remains largely constructive.”

On the fiscal front, the government continues to maintain a balanced budget (that is, with no primary fiscal deficit), “which is an uncommon achievement in both emerging and developed markets,” he indicated. Moreover, inflation remains largely anchored and, although monthly figures have persistently hovered around 2–3%, year-on-year measurements still show a slowdown.

Among the fundamentals, Carranza also highlighted that the South American country’s GDP growth “remains on track to register a solid 4.3% in 2025, even despite some downward revisions in recent months.”

Short-Term Support


Meanwhile, Alejo Czerwonko and Pedro Quintanilla-Dieck, from the Chief Investment Office at UBS, emphasized in a special report dedicated to Argentina that the U.S. intervention acts as a short-term “circuit breaker,” by strengthening the Central Bank’s reserves and reducing the risk of uncontrolled inflation.

The report highlights that this maneuver improves the chances of Javier Milei’s government regaining some political capital in the elections, although doubts persist regarding the sustainability of the exchange rate system and the pace of reserve accumulation.

UBS considers the package a temporary relief rather than a structural solution and maintains a neutral view on Argentine bonds, awaiting greater clarity on stabilization policies.

From the asset manager Payden & Rygel, Alexis Roach, emerging markets analyst, stated that “a landslide victory does not seem necessary to guarantee the country’s governability: a balanced outcome, in which the ruling party outperforms the Peronists, would be enough.”

Roach considered that “the financial support from the United States, although significant, is not enough to define a credible medium-term investment framework. After the elections, the market’s attention will focus on the government’s ability to reach agreements with centrist forces to secure a parliamentary majority, as well as on the strategy to regain access to markets.”

The fact is that the Argentine president showed a shift after being defeated in the Buenos Aires provincial elections. In addition to the U.S. economic bailout, he added a more moderate tone to his rhetoric, attempted to begin a dialogue with the more rational opposition, and showed an effort to connect with voters who have been enduring an adjustment that, although it helped reduce inflation, has yet to translate into improvements in the microeconomy.

Household delinquency in the South American country rose for the tenth consecutive month in August, reaching 6.6% of total credit—marking a new record in at least 15 years, according to the Central Bank’s banking report. Meanwhile, interest rates for overdrafts—one of the most common ways for small and medium-sized enterprises to finance working capital—increased from around 80% to 190% nominal annual last week, reaching the highest level in at least 17 years.

On top of all this, the dollar—the eternal social barometer of pre-election Argentina—recorded its biggest daily increase in nearly six weeks on Friday, October 17, while financial dollars (MEP and CCL) surpassed 1,500 pesos, despite the firepower implied by the interventions from the U.S. Treasury.