International portfolio diversification for Brazilian investors has gained a new ally. Itaú Asset Management and Vanguard have announced a strategic partnership aimed at expanding the range of products linked to international markets while simultaneously boosting the development of the Brazilian ETF market.
The first concrete outcome of the agreement is the restructuring of SPXI11—Itaú Asset’s S&P 500-tracking ETF launched in 2015. The fund will transition its underlying asset to the Vanguard S&P 500 UCITS ETF, a UCITS-domiciled vehicle designed to track the primary U.S. equity benchmark.
The move represents more than swapping one asset for another: it places two major asset management platforms—one with a deep footprint in Brazil and the other with global scale—within a single investment vehicle tailored for the domestic Brazilian market.
The updated structure also enables automatic dividend reinvestment, a feature that supports long-term compounding by keeping distributed dividends fully invested within the fund.
A Market Looking Beyond Brazilian Borders
The partnership comes at a time when international diversification is becoming increasingly vital for local investors. Itaú Asset already operates a platform of significant scale, managing over 1.2 trillion reais (approx. $231.1 billion) with 2.6 million clients and over 380 professionals.
The bank reports that its clients hold more than 250 billion reais (approx. $48.1 billion) in overseas investments—underscoring the magnitude of demand for international assets among its client base.
In this environment, ETFs provide an efficient avenue for accessing foreign markets. SPXI11 offers direct exposure to the S&P 500 through local Brazilian market infrastructure, holding approximately $67.8 million in net assets. Partnering with Vanguard allows Itaú to enhance this offering using one of the global industry’s most recognized index vehicles.
Vanguard’s Global Scale
Vanguard manages approximately $12 trillion in assets worldwide, serving tens of millions of investors. Founded in 1975, the firm is globally renowned for index-tracking strategies and low-cost structure. Its involvement in Brazil signifies a deeper commitment to one of Latin America’s largest investment markets, where exchange-traded products have steadily gained ground across equities, fixed income, and international assets.
Both institutions noted that the agreement encompasses broader areas of collaboration, including investor education, best-practice sharing, and future product development.
This multi-faceted alignment could prove particularly strategic. Itaú Asset currently operates a multi-desk setup managing 165 billion reais ($31.8 billion) across 23 distinct investment desks. Combining this local distribution and active desk network with Vanguard’s global indexing expertise positions both firms to address growing domestic demand for international exposure.
Ultimately, the alliance reflects a broader trend across the Latin American asset management industry: major domestic managers partnering with global platforms to expand international product offerings directly within local market clearing and execution systems.
As regulatory frameworks across the U.S., Europe, Asia, and the Gulf mature and converge in their treatment of digital assets, crypto investors are rethinking not only asset allocation but also their legal domicile. The core question has shifted from which assets to hold to which jurisdiction enables compliant holding, banking, and reporting under increasingly stringent oversight standards. This is the central finding of “Crypto Secure Jurisdictions: Where Crypto Actually Works,” a global report produced by Global Citizen Solutions (GCS), an international firm specializing in residence and citizenship planning.
The report evaluates how 22 jurisdictions integrate digital assets into tax systems, licensing regimes, and banking frameworks as cryptocurrencies transition into regulated financial infrastructure.
“Residency or citizenship determines how digital assets are taxed, reported, and maintained within the banking system,” stated Artur Saraiva, COO of GCS. “As crypto oversight expands, mobility serves as a structural hedge.”
Distinct Market Profiles
The study identifies three core traits common to resilient crypto jurisdictions: regulatory clarity (defined legal status and formal oversight), institutional infrastructure (regulated exchanges, custodians, and banking access), and predictable tax and compliance treatment.
Rather than naming a single “best” destination, the report categorizes countries by function:
Institutional Benchmark Jurisdictions: Switzerland, Singapore, Germany, the UK, and Canada prioritize legal certainty and integration into broader capital markets.
Structuring & Mobility Hubs: Portugal, Malta, Estonia, and the UAE balance regulatory alignment with attractive residency and tax-planning frameworks.
Deep Capital Markets: The U.S. remains the deepest market for digital capital, albeit under a multi-agency regulatory perimeter.
The report asserts that investment-driven migration now acts as a form of jurisdictional optionality, allowing cross-border investors to diversify regulatory exposure and structure operations under stable legal frameworks.
Regional and Emerging Paradigms
In Latin America, Brazil leads adoption while formalizing its framework under the Banco Central do Brasil to strengthen virtual asset service provider (VASP) compliance. El Salvador continues its state-level adoption model anchored by its Digital Assets Law, offering a high-conviction ecosystem distinct from traditional financial centers. Elsewhere, Caribbean nations with Citizenship by Investment programs are embedding digital assets into existing AML/CFT structures to safeguard credibility while accommodating financial innovation.
Wikimedia Commons"The South Sea Bubble, a Scene in 'Change Alley in 1720" by Edward Matthew Ward
The AI craze and the rallies it has generated in stock markets—especially in the United States—have put the debate over valuations back on the table. While some contend that this is a technology so revolutionary that it can handle all investor dreams, others see a promise too overblown to meet the market’s heavy expectations. Although the question of whether there is a bubble in AI-related stocks remains unanswered for now, the history of financial markets contains some relevant examples.
One of these is the so-called South Sea Bubble, which starred a British company that found successive new heights based on the excitement generated by its royal backing and the slave trade. In a matter of months, the stock inflated to unsustainable levels, and when the bubble burst, the scandal reached the doors of the English Parliament.
Founded in 1711 as a public-private partnership aimed at consolidating, controlling, and reducing the national debt and helping the United Kingdom participate in the lucrative slave trade, The South Sea Company sparked the interest of investors of the era.
In 1713, they secured the monopoly for the trade of enslaved Africans in the South Pacific Ocean, among the Spanish colonies in the Americas. The document known as the “asiento de negros,” a monopoly contract signed between the Spanish Crown and merchants from other countries, served as the framework for the business. This was because the Spanish monarchy preferred not to participate directly in the practice, instead subcontracting services from other European powers.
The Fever Begins
Considering how profitable the slave trade had been over the previous two centuries, the expectation was that the operation would be highly lucrative. The enthusiasm was boosted by the idea that foreign trade would normalize following the end of the War of the Spanish Succession in 1713.
This prospect, along with the confidence generated by the royal backing of the company, attracted a variety of English investors. There are even reports that the physicist and mathematician Sir Isaac Newton participated in this financial fad, investing the modern equivalent of millions of pounds sterling.
Initially, the firm offered a 6% interest rate to those who bought the stock, but the excitement around the shares drove them to a peak in 1720. And the stock maintained its strength, even though no slave trade boom materialized after the signing of the Treaty of Utrecht, which ended the war.
The Spanish gave the British a limited portion of the business and even kept part of the profits, placed taxes on the importation of slaves, and put strict restrictions on the fleets of ships they could send. This undermined the profit prospects of the business.
However, the stock price continued to scale, supported by royal backing. In 1718, King George I of Great Britain assumed the governorship of The South Sea Company, which generated further confidence among the investing public, driving prices higher and coming to generate a 100% interest in the shares.
The Beginning of the End
As happens with many bubbles, prices detached from business fundamentals. Considering that the trade of enslaved Africans was not generating the necessary revenue to justify the stock boom, the rally began to falter.
Furthermore, the company was trading more and more of its own shares and was beginning to participate in questionable practices. There are records of people within the company pressuring—or bribing—their friends and acquaintances to buy shares, keeping valuations high, and there were even bribes and other acts of corruption involving British ministers and officials.
In 1720, the year the house of cards fell, the British Parliament allowed The South Sea Company to buy the national debt. The company paid out 7.5 million pounds to acquire a debt of 32 million pounds. The plan was to use the profits from share sales to pay the interest on the debt.
It was at this moment that the stock price reached its peak. The company’s shares went from about 100 pounds sterling in 1719 to 128.5 pounds in January 1720. From that point, widespread market enthusiasm took it over 1,000 pounds in August of that year.
Shortly after, the price collapsed to little more than its IPO price.
The dilemma of the model created by The South Sea Company is that it was a kind of financial carousel, where the expected added value from the slave trade did not materialize. Instead, the company was inflating its stock price with its own market operations against the public debt it acquired.
The Bursting
The turning point was in September 1720, when the shares began to fall. Once doubt set in, investors began to lose faith and sell the stock, causing prices to plummet. The British company’s stock ended up falling back to 124 pounds in a matter of days, accumulating a drop of more than 80% from its highest point.
The end of the bubble brought heavy losses with it and, along with them, outrage among the investing public. Because the collapse happened in the dawn of the English stock market—the creation of The Royal Exchange dates back to 1571, driven by Queen Elizabeth I—there were no explanations available for the level of speculation the bubble generated in the first place.
A significant number of people lost a lot of money, to the point that the suicide rate increased, according to reports of the era, and those affected reached the political sphere demanding explanations. Thus, Parliament launched an investigation that uncovered the company’s bad practices, turning into a financial and political scandal.
In response, lawmakers passed the Bubble Act of 1720, prohibiting the creation of joint-stock companies like The South Sea Company without special permission by royal charter.
Mind you, although the effect was highly publicized, it did not have a major impact on the general economy and did not generate a recession, unlike other famous bubbles in history.
The company, for its part, continued to trade until 1853, undergoing a restructuring in the interim.
Over the past decade, Europe appeared condemned to lower growth, less innovation, and more modest returns. However, this consensus is beginning to reverse. An improving economic cycle, increased spending on infrastructure and defense, a push toward reindustrialization, and the development of new technologies are putting Europe back on investors’ radars. Lazard, Edmond de Rothschild, MFS, Aberdeen, and Neuberger agree that the continent is reaching an inflection point, opening up investment opportunities in both equities and fixed income—though they warn that the potential lies not so much in overall indexes, but in the sectors and companies capable of benefiting from this new cycle.
This shift in perception is not driven solely by better economic performance. Underlying fundamental economic improvements are beginning to back the investment thesis. Benoit Anne, strategist at MFS Investment Management, highlights that Eurozone growth has positively surprised in recent weeks, with leading indicators pointing to a stronger-than-expected recovery. Specifically, he underscores that the Eurozone Citi Economic Surprise Index reached its highest level since early 2023—a sign that the European economy’s resilience is proving greater than anticipated by the market. In his view, this environment reinforces the appeal of both European equities and credit.
This macroeconomic improvement coincides with a structural shift that several asset managers view as a primary investment driver for the coming years. Edmond de Rothschild Asset Management contends that Europe is undergoing a “silent revolution” propelled by increased investment in infrastructure, defense, electrification, and artificial intelligence. Unlike other cycles, they explain, the potential is not limited to a handful of large-cap companies, but spans the entire industrial value chain, with small- and mid-cap companies playing a particularly prominent role.
Reindustrialization Shifts From Narrative to Opportunity
In this regard, Craig Wright, Head of European and Asia-Pacific Real Estate Investment Research at Aberdeen, points to the new global European policy, “Made in Europe.” Designed to raise manufacturing industry output to 20% of GDP by 2035, this initiative is driving a structural transformation that Wright believes will require massive investments in factories, logistics, pharmaceuticals, energy, and semiconductors.
According to the Aberdeen manager, certain figures are striking: reaching the target of industry representing 20% of European GDP by 2035 will require building roughly 20 million square meters of industrial and logistics space every year for a decade. Furthermore, defense spending alone could generate demand for an additional 37 million square meters, over and above e-commerce growth.
Capital Looks Toward European Fixed Income
Benoit Anne of MFS considers Euro high yield to currently be the most attractive asset class in global fixed income from a risk-adjusted carry perspective. Meanwhile, Paul Grainger, Managing Director and Senior Portfolio Manager for Fixed Income at Neuberger, offers a counterpoint: Europe remains more interest-rate sensitive, and growth still displays vulnerabilities. Yet, precisely for these reasons, he believes European fixed income is once again offering compelling opportunities.
“European real yields have also risen as the ECB raised rates and continued to guide or allow the market to price in further hikes; currently, the market is pricing in two additional hikes over the coming year, which would put official rates at 2.75%. The impact of AI spending appears smaller in Europe, but we must still account for positive correlations and links between major developed bond markets,” Grainger explained.
The Major Catalyst: Increased Public Spending
Rising expenditure on infrastructure and defense could become one of the primary drivers of European growth over the coming years, provided the geopolitical landscape does not significantly impair the economy. On this point, Ronald Temple, Chief Market Strategist at Lazard, explained that the war with Iran penalized Eurozone growth forecasts more than those of any other major developed economy this year.
“Even so, I maintain an optimistic outlook and believe the region’s GDP will accelerate heading into 2027, driven by higher infrastructure and defense spending. As long as the war continues, Eurozone inflation will remain exposed to energy price volatility. However, there are few signs of spillover from energy into the broader economy, giving me confidence that inflation will ease by 2027,” Temple emphasized.
Without a doubt, expert consensus presents Europe as a major investment opportunity ahead of the next economic cycle. While international geopolitical ambiguity means conditions could evolve rapidly, experts remain notably optimistic regarding the continent’s outlook.
Ricardo Sucre returns to Amerant, marking a new chapter in his career while reinforcing the firm’s international growth strategy. After 12 years at Mercantil Commercebank, nine at Morgan Stanley, and two at Bolton Global Capital, Sucre has stepped into the role of Head of International Wealth Management Sales at Amerant, aiming to drive business development, recruit financial advisors, and support the growth of international books of business.
In a dialogue with Funds Society, the executive outlines the advantages of a platform combining wealth management, banking, brokerage, advisory, and lending, while detailing Amerant’s growth objectives for the coming years. Venezuela once again holds a prominent position within the strategy, while Argentina, Colombia, and Central America stand out as priority markets. Amid growing demand for dollar-denominated assets and access to U.S. markets, Sucre highlights Amerant’s capacity to deliver a comprehensive service relationship to Latin American clients.
You return to Amerant following your initial time at Mercantil Commercebank and your tenure at Morgan Stanley and Bolton Global Capital. What prompted your decision to return?
I worked at Mercantil Commercebank for 12 years between 2002 and 2014, serving in Treasury, Private Banking, and Investments. It was an extraordinary training ground that gave me a solid foundation, enabling me to later explore opportunities at institutions like Morgan Stanley, where I spent nine years, and Bolton Global Capital over the past two years.
Both experiences contributed immensely to my professional development, but I felt a key element was missing: a corporate culture aligned with my principles and an organization close to my roots. Amerant represents precisely that combination. Furthermore, the ability to offer an integrated wealth management and banking platform serves as a unique differentiator in our industry, particularly for the international segment.
How has the institution evolved since your first tenure, both in terms of brand and strategy?
The institution has grown, matured, and significantly diversified its business lines and presence across various international markets. In the specific case of Amerant Investments, we have strengthened a strategic relationship with Pershing spanning over 20 years, allowing us to offer a robust and highly competitive platform. The range of products, services, and solutions available today competes with and even exceeds that of many participants within this market segment.
What does your role as Head of International Wealth Management Sales entail?
My role encompasses three main responsibilities: leading business development efforts and recruiting financial advisors for Amerant Investments’ international platform, highlighting the strengths of an integrated offering of investments and banking services; supporting our existing group of international advisors—seasoned professionals with established books—by helping them optimize their business growth through technology, solutions, and investment products; and managing my own client portfolio, built on long-term relationships over many years. My role retains an important production component that I look forward to continuing to build.
What are your concrete goals for the next 12 to 24 months?
Our goal is to achieve double-digit annual growth in assets under management. To accomplish this, onboarding top-tier advisors with transferable books of business and experience in the international segment will be essential.
Amerant emphasizes an integrated offering. How does that translate in practice for an international client?
In practice, it means a client can hold an investment account—whether brokerage or advisory—custodied at Pershing, alongside a bank account at Amerant Bank. The integration of both platforms provides access to a much broader suite of products and services. A clear example is the ability to secure a portfolio-backed line of credit issued directly by the Bank, combining investment and financing capabilities within a single relationship.
What financial advisor profile are you looking to recruit, and what does Amerant offer compared to independent models like Bolton?
We are seeking advisors with expertise in international business and transferable portfolios who value the benefits of an integrated banking and investment platform. Compared to other models, Amerant offers a unique mix of banking capabilities, investment solutions, specialized financing, and over four decades of experience serving international clients, creating additional opportunities for both advisors and their clients.
Venezuela and the U.S. have been normalizing relations, following the lifting of sanctions on Venezuelan public banking in April of this year. How does this process impact Amerant’s business, given its Venezuelan roots?
Venezuela is part of Amerant’s roots; it is a market we have never walked away from. On the contrary, activity has increased in recent years. Without a doubt, developments following January 3rd have generated renewed interest and expanded growth opportunities.
Do you expect a rebound in capital flows from Venezuela or the diaspora into the U.S.?
Amerant has managed the Venezuelan market for many years—I would venture to say since its founding over 40 years ago. In fact, Venezuela is a market that never stopped growing at Amerant, even during its most challenging periods. Today, since my return to the institution, I can state that Amerant possesses a platform, infrastructure, and team better prepared than ever to capitalize on emerging opportunities.
Beyond Venezuela, which other Latin American markets are priorities?
Argentina, Colombia, and several Central American countries represent priority markets for our international growth strategy. The geographic diversification we have driven over recent years has yielded excellent results, particularly on the Bank’s side.
How do you view international wealth management clients’ demand for dollar assets and U.S. banking in today’s geopolitical environment?
Year after year, we have observed growing demand from international clients to keep their savings, investments, and capital market access based in the United States. Beyond the stability of the dollar and the depth of U.S. financial markets, clients seek institutions that make them feel welcome, understand their specific needs, and deliver solutions tailored to their reality and cultural context.
More than half of surveyed insurers plan to increase their exposure to private credit over the next 12 to 24 months, outpacing investment-grade public fixed income, which was cited by 48% of participants. These findings from the 2026 Global Insurance Asset Survey by Mercer (a business of Marsh) confirm that insurer demand for private credit remains robust. Indeed, the 2026 results contrast significantly with the 2024 survey, when 37% and 32% of insurers planned to increase their allocations to fixed income and private credit, respectively.
However, the study reflects that while demand remains strong, insurers are becoming increasingly selective. Within private credit, allocation priorities are focused on direct lending, investment-grade private placements, investment-grade structured credit, asset-backed finance, net asset value (NAV) lending, and fund finance.
“Private credit represents an attractive opportunity for insurers, particularly in the asset-backed space. It allows for the diversification of corporate risk and access to higher yields compared to similarly rated public investment-grade bonds,” says David Morrow, Global Insurance Proposition Leader at Mercer.
The study indicates that appetite for private credit is particularly strong in North America. In the United States, 65% of respondents plan to increase their allocations, a figure that rises to 74% in Canada. In contrast, only half of European insurers plan to increase their exposure, dropping to 46% in the United Kingdom.
Interest is most pronounced among larger insurers: 81% of those managing over $25 billion plan to increase their exposure, compared to 46% of entities with assets below that threshold. By segment, life insurers show a higher propensity to invest in private credit than health and property and casualty (non-life) insurers.
Aligned with Private Credit Risks
Insurers are fully aware of the risks involved in private credit. According to the Mercer study, the primary concerns highlighted are the compression of the illiquidity premium and the narrowing of spreads, reflecting a desire to be adequately compensated for liquidity constraints. Other noted issues include the deterioration of underwriting standards and covenants, as well as an increase in defaults, spread widening, or payment-in-kind (PIK) structures—factors associated with borrower stress or a potential loosening of lending standards as the market matures.
“Capitalizing on the benefits of private credit requires insurers to conduct a rigorous manager selection process, choosing those with proven capabilities in origination, underwriting, portfolio construction, and special situations management to navigate the next phase of the credit cycle,” notes Amit Popat, Global Head of Financial Institutions at Mercer.
Capabilities Gap in Private Markets
The survey reveals a clear gap between insurers’ interest in private markets and their readiness to capitalize on opportunities. Only 30% state they possess “most” of the necessary capabilities to invest with confidence, while 29% acknowledge having only “some” of them.
This lack of resources limits insurers’ ability to allocate capital, achieve sufficient diversification in private markets, and maintain appropriate allocations with ongoing due diligence. Against this backdrop, investment partnerships are growing to secure required expertise in manager evaluation, cash flow modeling, capital treatment, liquidity management, and execution support.
“Even the largest insurers recognize they do not possess all origination capabilities or resources internally, leading them to seek specialized external managers in private credit to fill gaps and enhance risk-adjusted returns,” points out Josh Zwick, partner in the Insurance and Asset Management practice at Oliver Wyman. “Everyone wants to strengthen their capabilities, and that often means bringing in partners to navigate the complexity across the diverse segments of the private credit market,” he adds.
AI Still Plays a Limited Role in Insurer Investing
The capability gap is also mirrored in the adoption of artificial intelligence. More than half of insurers report not using AI in a significant manner. Fewer than a third employ it in data analytics and alternative investment research. The most immediate AI applications within investment teams are data integration, scenario generation, document review, manager monitoring, and risk analysis.
Finally, the study highlights that scale is a decisive factor: 75% of entities managing over $100 billion report significant AI use, compared to barely 10% of those managing under $1 billion.
The U.S. financial advisory industry is facing a major generational shift. Approximately 35% of financial advisors, controlling 40% of industry assets, plan to retire over the next decade, with more than a quarter showing uncertainty regarding their succession plans within their firms. According to Cerulli Associates, this reality highlights the pressing need for wealth management firms to better attract and retain the next generation of talent.
Additionally, pressure is mounting on firms to establish comprehensive and effective training programs that equip junior advisors with the tools and skills required for long-term success. “Providing advisors with the resources and guidance needed to develop succession plans and transfer client portfolios to the next generation will be crucial for wealth management firms,” they note in one of their latest analyses.
However, many training managers have identified obstacles in selecting and developing junior profiles. According to Cerulli, 73% of these professionals point to the time required to learn the business as a major challenge, followed by 67% who state that daily instruction consumes too much time.
Cerulli recommends that firms adopt a longer-term approach when onboarding young, qualified talent. “Junior advisors integrated into broader advisor teams with long-term career development plans will be better positioned to create natural retirement and business succession pathways for senior advisors, who can monetize their practice while transitioning it to highly qualified financial advisors within their own firm,” states Olivia Morgan, analyst at Cerulli.
In the consulting firm’s experience, practices that adopt this approach and highlight it during recruitment processes will be far more likely to attract top-qualified candidates interested in wealth management—particularly those who prioritize a sustainable, long-term career path. “A long-term strategy functions as both a retention and recruitment tool, fostering a high-quality pipeline of new and existing advisors to seamlessly manage the transition stemming from industry retirements,” Morgan concludes.
\Private markets are entering a new growth phase, as strong investor demand and expanded access for retail investors reshape how capital is raised, structured, and distributed, according to new research by State Street Corporation.
The fifth annual Private Markets Study from State Street, titled “Resilience Meets Opportunity,” shows that demand in private markets remains exceptionally resilient, even against a backdrop of geopolitical uncertainty, inflationary pressures, and market volatility. Only 7% of firms expect to reduce their allocations, while half plan to increase their exposure, reinforcing the role of private markets as an essential component in long-term portfolio construction.
Retail Participation
At the same time, the sector is undergoing a structural shift toward retail investor participation as firms broaden access through wealth management channels. Specifically, more than 84% of asset and wealth managers already offer or plan to offer private market strategies to retail investors, demonstrating that retail access has moved from a long-term ambition to a core component of industry strategy.
“The private markets story is defined by resilience on one side and reinvention on the other. Demand remains strong, but bringing private markets to a broader investor base at scale is fundamentally reshaping how the industry operates. Success will depend on who can manage complexity and deliver consistent results to a much broader set of clients,” explains Joerg Ambrosius, President of Investment Services at State Street.
According to the firm, while expanding access to retail investors remains the primary opportunity, firms are taking a more measured approach regarding the pace of growth. The report notes that around 43% of organizations now expect retail-oriented vehicles to account for at least half of private market fundraising within the next three years (down from 56% in the previous year’s survey), reflecting a more realistic view of distribution and operational challenges. Demand is driven mainly by diversification and return potential, as well as access to key investment themes.
Capital Allocation Trends
The study also points to a clear shift in where capital is directed. Findings indicate that artificial intelligence and AI infrastructure rank as the top investment theme globally, underscoring the role of private markets in financing long-term structural growth across economies.
“Even in a more uncertain environment, private markets are increasingly where investors access the most important long-term growth trends, serving as a critical source of return and diversification. AI, infrastructure, and other structural opportunities are reinforcing the role of this asset class as a core allocation in portfolios. Firms will need to keep adapting to meet demand from a broader range of investors,” comments Donna Milrod, Chief Product Officer at State Street.
As firms scale their private market strategies toward retail investors, operational complexity emerges as the ultimate hurdle while asset and wealth managers adapt to serve a larger, more diverse client base. In this regard, nearly eight out of ten respondents cite liquidity management as a key challenge, with specific pain points including redemption management, cash forecasting, and liquidity stress testing as firms adjust to more dynamic investor flows. Regulatory compliance, reporting, and investor servicing are also intensifying as firms expand beyond their institutional client bases.
“Democratization is raising the bar for how private markets are structured and supported. Delivering these strategies at scale requires more than product innovation. It demands the operational, data, and infrastructure capabilities needed to deliver transparency, manage liquidity, and meet the expectations of a very different investor base,” clarifies Scott Carpenter, Global Head of Alternatives at State Street.
The Distribution Channel
The study highlights a clear consensus on distribution: wealth management platforms are viewed as the primary channel to access private markets, whereas defined contribution structures remain a secondary route for most firms. According to State Street, this reflects both investor suitability considerations and the role of financial advisors in navigating more complex investment structures.
Furthermore, the survey reveals that institutional investor demand for private markets remains remarkably resilient despite ongoing market and geopolitical uncertainty. “Demand is driven primarily by return expectations and diversification benefits, reinforcing the role of private markets as an essential allocation in long-term portfolio construction,” the report notes.
Taken together, the findings point to an industry entering a more demanding phase where growth, resilience, and innovation must be matched with operational discipline and scalability. Private markets are no longer defined solely by access. Instead, competitive advantage is shifting toward firms that can offer agile liquidity frameworks, transparency, and performance at scale.
Venezuela is leaving behind, at least partially, one of the greatest financial isolations in Latin American history. The gradual easing of United States sanctions is no longer limited to the oil sector.
Washington and Caracas began opening spaces for financial services, debt advisory, banking operations, and certain transactions linked to PDVSA, creating the conditions for the country to attempt a return to international capital markets.
The move is particularly relevant for fixed-income investors. Venezuela and its state oil company, PDVSA, have accumulated around $60 billion in defaulted bonds, while the total amount of obligations potentially involved in the restructuring could range between $200 billion and up to $240 billion when overdue interest, bilateral loans, corporate claims, and arbitration awards are added.
Calculations by analysts consulted by international agencies indicate that bond claims alone, including past-due interest, could reach about $102 billion.
The regulatory shift began taking a concrete financial shape on May 5, when the U.S. Treasury’s Office of Foreign Assets Control (OFAC) issued General License 58, which allows certain legal, financial, and consulting services related to an eventual restructuring of Venezuelan and PDVSA debt. The license, however, did not yet authorize the payment or settlement of debt nor direct negotiations between Caracas and its creditors.
That nuance is fundamental for markets because Washington did not open the Venezuelan market all at once; rather, it began removing one of the main regulatory obstacles so that a financial resolution could be reached.
Bond Market, First to React
The reaction of Venezuelan bonds shows the extent to which investors were awaiting a normalization of the financial situation in Venezuela after years of isolation.
When the United States authorized certain operations with PDVSA in March, the Venezuelan sovereign bond maturing in 2031 rose to 50.25 cents on the dollar, while the PDVSA 2027 advanced to 35.35 cents, according to LSEG data cited by Reuters.
The movement was not a simple reflection of better oil prospects. The market began discounting the possibility of an orderly restructuring and, above all, that Venezuela could once again generate sufficient income to support some form of recovery for creditors.
By mid-July, the Venezuela 2031 bond reached trading levels around 56 cents on the dollar, although it later pulled back toward the 54–55 cent range. Market records show that the instrument was well above its levels from the beginning of the year.
The signal is clear: the market is assigning a much higher value to debt that for years was virtually a frozen asset.
The next step was Caracas’s decision to formally initiate the restructuring of its external debt and that of PDVSA.
The Venezuelan government announced a process in May that it described as “comprehensive and orderly,” aiming to reduce the burden of accumulated obligations. In parallel, it hired Centerview Partners as financial advisor to lead the process.
The decision was received positively by markets, but it also opened a much more complex debate: what is Venezuela actually worth?
The absence of updated financial information is one of the main obstacles. Reuters noted in July that Venezuela had gone years without publishing complete debt statistics and that the universe of obligations could reach $240 billion, well above previous estimates of between $150 billion and $200 billion.
The problem is not only the size of the debt, but also its composition.
Venezuela owes approximately $25 billion to bilateral creditors; about $8.69 billion corresponds to the Paris Club, and between $13 billion and $15 billion are estimated to be obligations owed to China, according to estimates cited by Reuters.
Added to this are nearly $4 billion owed to multilateral banks such as CAF and the Inter-American Development Bank, along with over $20 billion in arbitral and judicial claims.
The complexity increases due to corporate obligations: Repsol has indicated that Venezuela owes it around 4.55 billion euros, while ENI reported about $3.3 billion in overdue accounts from PDVSA as of the end of 2025.
An Opportunity for Distressed Debt Funds
For the asset management industry, the Venezuelan case could become one of the most interesting distressed debt operations of the decade.
The reason is simple: there is an enormous volume of debt trading at deep discounts, a country with the largest proven oil reserves in the world, and a geopolitical shift that is progressively reducing entry barriers to the financial system.
However, an exceptional set of risks also exists: the true magnitude of the debt, the quality of financial information, legal uncertainty, creditor claims, the status of Citgo, PDVSA’s production capacity, and the possibility that the restructuring process will drag on. In other words, Venezuela is becoming investable again before becoming normal again.
That nuance may be the key for specialized managers. The opportunity lies not necessarily in buying Venezuelan debt as if it were traditional emerging market debt, but in evaluating recovery scenarios, creditor hierarchy, collateral, underlying assets, and the probability of normalization.
Private banking is also watching the return with interest, and the financial reopening is starting to alter the positioning of Venezuelan banking as well.
Private entities such as Banesco and Banco Nacional de Crédito continue operating in the local foreign exchange market and publishing financial information during 2026, while the banking system adapts to an environment of greater foreign currency usage and an eventual normalization of international financial relations.
In this sense, there is evidence that international banking is laying the groundwork: JPMorgan and Jefferies evaluated visits to Caracas amid growing investor interest in the economic recovery and debt restructuring, although both banks declined to comment publicly on their plans.
However, it seems the story still has several chapters left to unfold—at least that is also what some relevant global actors are saying.
The True Return Will Come When the Primary Market Returns
The biggest change for Venezuela will not be that its existing bonds rise in price. It will be that the country can issue new debt again under normal conditions, and it appears that moment is still far off.
The removal of secondary sanctions or the authorization of operations on existing debt can improve liquidity and the pricing of old instruments, but a full return to the primary market requires much more, including factors such as: reliable statistics, audits, a credible macroeconomic framework, a restructuring accepted by creditors, legal recognition of obligations, and a demonstrable capacity to pay.
The resumption of relations with the IMF and the World Bank constitutes another relevant component. Both institutions resumed relations with Caracas in April after several years of interruption, opening the door for technical assistance and eventually the use of approximately $5 billion in Special Drawing Rights (SDRs) that Venezuela holds unutilized.
IMF Managing Director Kristalina Georgieva warned, however, that Venezuela still faces a “very difficult road” to recover macroeconomic and financial stability.
U.S. regulatory development reflects precisely this gradual nature.
OFAC maintains numerous restrictions on Venezuela and its state entities. Even after the new licenses, not all debt, equity, PDVSA asset, or sanctioned entity operations are authorized.
A particularly important example is the PDVSA 2020 bond with an 8.5% coupon, backed by an equity stake in Citgo. OFAC has issued specific licenses for certain operations related to this instrument, showing that Washington is advancing through specific exceptions and permits rather than an immediate, general elimination of the sanctions regime.
That mechanism has a direct consequence for investors: regulatory risk remains priced in.
For this reason, even though Venezuelan bonds have left their lows behind, they cannot yet be treated as conventional emerging market debt.
Oil Is the Key to Capital Markets
Venezuela’s recovery largely depends on its ability to convert its massive oil reserves into cash flow.
Reuters reported in July that oil companies and refiners are resuming direct deals with PDVSA as sanctions ease. Phillips 66, Valero, Reliance Industries, and Tipco Asphalt are among the companies that have resumed or prepared direct purchases of Venezuelan crude, while Chevron, Repsol, and Eni expand operations linked to Venezuela.
Currently, Venezuelan oil production stands at around 1.2 million barrels per day, according to Reuters, with expectations of reaching 1.37 million toward the end of 2026.
For debt markets, that evolution is crucial. Higher production means more external revenue, greater fiscal capacity, and, potentially, a source of resources to sustain a restructuring.
Yet a risk remains: that markets discount an oil recovery too quickly when it actually requires investment, infrastructure, technology, and legal stability.
Stepping Out of the System’s “Shadows”
Venezuela’s own monetary authority has described the shift as an opportunity to return to the international financial system.
Luis Pérez, interim president of the Central Bank of Venezuela, told Reuters in May that restructuring the Republic and PDVSA’s debt would allow the country to be brought “out of the shadows” of the global financial system.
Pérez also maintained that the United States plays a central role in lifting restrictions and highlighted the rapprochement between the Venezuelan central bank and the U.S. Treasury. Washington had previously authorized the Central Bank of Venezuela to conduct certain operations with foreign entities.
The statement is significant because it reflects the shift in perception within Caracas: lifting sanctions is no longer seen solely as a diplomatic or oil matter, but as the necessary condition for rebuilding financial channels that allow for debt refinancing, attracting investment, and eventually returning to the international capital market.
Perhaps the most important shift is that Venezuela is ceasing to be exclusively a geopolitical problem and becoming an investment thesis once again.
The gradual lifting of sanctions has reactivated bond prices, put PDVSA back on the radar of international investors, and set off a race among banks, distressed funds, financial advisors, and creditors to determine how much can be recovered from a debt load that could top $200 billion.
However, the market is also sending a message: the first stage of normalization may yield huge profits for those who bought debt at crisis prices, but the second—rebuilding a functional Venezuelan capital market—will require something far more difficult than an OFAC license. It will require trust, and the price of that trust cannot be measured entirely in monetary terms.
That trust must be built through financial transparency, predictable legal rules, sustainable oil production, and a debt restructuring that creditors consider credible.
For now, Washington has opened the door and investors are already entering the foyer; but Venezuela’s true return to Wall Street still depends on Caracas demonstrating that it can once again become an issuer, not just a distressed asset.
Amid the geopolitical uncertainty and marked volatility that characterized the first half of 2026, financial advisors in Latin America and US Offshore made strategic decisions to rebalance their portfolios, according to findings from the latest Advisory Portfolio Barometer by Natixis Investment Managers. The report, which analyzes 53 moderate model portfolios, highlights that the strongest portfolios did not simply take on excessive risk, but rather managed and applied risk more effectively.
The most notable finding was the reaffirmation of the traditional investment core: traditional assets (equities and fixed income combined) remained the preferred option, representing 89% of the average portfolio. The report also revealed a reconfiguration of how advisors manage risk. Facing a scenario where conventional defensive formulas lost effectiveness, professionals chose to dynamically adjust their strategic weightings, seeking a balance between capturing growth and protecting capital through more agile vehicles.
Flexibility in Bonds and Greater Weight Assigned to Equities
To navigate an environment in which equities and bonds moved in the same direction, reducing the protection traditionally offered by fixed income, advisors turned decisively toward flexibility. Diversified and flexible strategies reached 60% of the average fixed-income allocation, and purely flexible fixed-income mandates alone represented 40% of this asset class. This flexibility gave managers the necessary leeway to actively adjust duration and credit risk.
Alongside this search for flexibility, the second major decision made by advisors was to increase equity exposure to 47% of the total portfolio, an increase of 4 percentage points compared to the first half of 2025. To fund this higher equity allocation and make room for real assets, professionals moderately reduced their position in traditional fixed income, which settled at 42% of the total portfolio.
This is affirmed by Lucas Pérez, Country Head for the Southern Cone at Natixis Investment Managers: “This study confirms what we have been observing in the market: the advisors who navigated the first half of 2026 best were not those who took on the most risk, but those who managed it more intelligently. Flexible fixed income gave them maneuvering room amid rate shifts, and the increase in equities and real assets reflects a more accurate reading of the economic cycle. The challenge now is that, with the correlation between equities and bonds at historically high levels, diversification can no longer rely solely on traditional instruments, and that applies to our clients across the region as well.”
Concentration Management and Tactical Diversification
The Natixis IM barometer showed that portfolio execution and internal structure were the factors that drove performance differences among advisors. One of the most decisive tactical choices among top-quartile portfolios (the best performers, with a half-year return of 9%) was rigorous risk management through strict control of concentration risk. Leading portfolios capped the weight of their top three positions at 40% of total assets, in sharp contrast to bottom-quartile portfolios, which kept a high 53% of their capital exposed to just three instruments, leaving them more vulnerable to market volatility.
This drive for lower concentration was also reflected strategically within the equity component. While top-performing portfolios diversified their exposure across a median of seven positions and capped their largest single holding at 32% of the equity component, the lower-performing group concentrated a high 45% in a single position while holding an average of only four assets in total. This lack of diversification prevented lagging portfolios from participating evenly in the market recovery during the second quarter of the year.
The barometer also revealed a clear shift in credit approach. Top-performing advisors opted to reduce traditional global fixed income to 35.9% of their bond allocation (compared to 49% in the bottom quartile). Instead, they rotated that capital into more targeted niches that offered a better risk-adjusted return profile, tactically increasing their exposure to corporate debt, emerging market paper, and short-duration strategies.
Finally, the last high-impact decision distinguishing the most resilient portfolios was the incorporation of uncorrelated hedges. Nearly half of the top-quartile portfolios incorporated alternative and real assets (such as commodities and real estate), compared to less than a third of bottom-quartile portfolios doing so. This tactical inclusion allowed leading advisors to generate a 23% diversification benefit (versus 15% for lagging portfolios), successfully offsetting the historically positive correlation between equities and bonds that affected the industry during the first half of the year.
