Looking Beyond Home Bias? Brazilians Open the Door to Offshore Assets

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Inversión en activos offshore por brasileños
Photo: Diego Torres Silvestre. Paulo Sampaio Named Head of Latin America Southern Cone for S&P DJI

One of the Idiosyncratic Features of Brazil’s Financial Market—the Largest in Latin America—is Its Notorious Home Bias. With high interest rates, a deep and competitive industry, and substantial capital across all segments, Brazilian investors have historically favored domestic investments. However, this era of local bias appears to be starting to fade, as capital holders in the country recognize the importance of international diversification.

Historically, only a small percentage of total domestic portfolio wealth has been invested in foreign assets, according to data from the Brazilian Financial and Capital Markets Association (Anbima). This includes portfolios of major institutional players such as pension funds, which are even more conservative, with an average of just 1%.

This scenario has been shifting recently, driven by a combination of macroeconomic factors. By May, the real had depreciated 6% against the dollar in 2025, while the Ibovespa had fallen 6.5% year-to-date, reflecting internal fiscal uncertainties and a more restrictive global environment. In contrast, international equity indices delivered more attractive returns, prompting growing interest from Brazilian investors in allocating assets abroad.

Brokerages, asset managers, and multi-family offices have been adapting their structures to respond to this new investor behavior and the growing demand for global products.

Offshore Outpost: Bradesco’s Strategy

In their efforts to consolidate international operations and offer a platform in the renowned U.S. market, some investment firms have turned their attention to Miami.

One illustrative example is Bradesco Asset Management (BRAM), which has been expanding its international exposure with the opening of a new office in the Florida city. This move positions the firm as an international business hub for the Bradesco Group.

“Brazilian clients are increasingly structuring their international allocations. In the past, it was a tactical decision focused on the dollar. Today, we see a more strategic stance, with permanent presence abroad,” explains Priscila Ramirez, Head of Business Development at BRAM, in an interview with Funds Society. She leads the new operation, which is integrated into Bradesco Bank in Miami.

With approximately 930 billion reais (around US$164.8 billion) in assets under management, BRAM represents 8.5% of Brazil’s fund market. In the U.S., the manager is focusing its presence on three fronts: relationships with institutional investors and global asset managers; expanding product offerings for Private clients; and serving a new segment called Principal, aimed at High Net Worth clients with assets starting at 300,000 reais (about US$53,200).

“Clients will have access to a full banking structure, not just an expanded investment portfolio,” says Ramirez. The Miami office will allow them not only to open checking accounts in the U.S., but also to invest in a portfolio of around 50 offshore funds, selected through a curated process involving ten international partner managers.

BRAM is also registered as a manager with the SEC, which, according to Ramirez, broadens its ability to serve foreign investors, especially pension funds in Latin America and Europe.

More Exposure: XP’s Recommendation

Brazil’s largest brokerage and a major player in local financial advisory, XP, has made a significant shift in its recommended portfolio, now urging investors to increase their international exposure. Since April, the recommendation has been for at least 15% of the portfolio to be allocated to offshore assets.

“Retail clients today have between 3% and 4% of their wealth outside Brazil. That’s too little. Especially for this profile, it should reach around 15% over the next one, three, or five years,” says Rodrigo Sgavioli, Head of Allocation at XP, quoted by InfoMoney.

XP has worked to facilitate this shift with solutions like its international account, which provides direct access to global assets without the need for complex structures like offshore companies. “The XP international account offers a simple solution for those seeking diversification,” he explains.

Since its launch in 2022, the account has offered access to over 10,000 assets listed on Nasdaq and NYSE, corporate bonds, U.S. Treasuries, and more than 100 global funds.

The firm’s thesis is backed by hard data: “The Brazilian capital market represents only 1% to 2% of the global market. That means anyone who keeps 100% of their wealth in Brazil is giving up on 98% of the world’s available opportunities,” according to Sgavioli.

The firm also promotes international investment as a way to protect wealth against internal shocks and inflation. “In times of instability, the dollar appreciates, which preserves the purchasing power of those with dollar-denominated assets,” he adds.

In this vein, Sgavioli affirms that the move toward internationalizing portfolios is not a passing trend, but part of a long-term strategy. “The major themes that will shape the next 10 or 20 years—such as technology and artificial intelligence—are being led by companies listed on U.S. and European stock exchanges,” he comments.

XP’s portfolio overhaul also includes a fixed income component, where it launched Certificates of Deposit (CDs) in May—fixed income securities issued by global financial institutions, similar to Brazilian CDBs. “Our mission is to democratize access to international investments just as we did in Brazil,” says Rodolfo Buim, Product Manager at XP in the international division.

A Must for MFOs: The Case of MSX

“For us, offshore is mandatory,” states Marco Saravalle, CIO of MSX, a recently established multi-family office in Brazil. In an interview with Funds Society, he emphasizes that international allocation is no longer optional and has become a structural practice in wealth management.

Saravalle notes that Brazilian investors are particularly sensitive to two factors: exchange rates and politics. “They usually act in the opposite way to what’s ideal. They seek offshore investments only after the real has already depreciated significantly. The right move would be to position themselves when the real is strong,” he says. He recalls that when the dollar hit the 6.2 to 6.3 reais range, demand for foreign assets rose significantly.

The investment manager also warns about the high correlation among local assets. “Many people think they’re diversifying by holding shares of Bradesco, Itaú, Petrobras, CDBs, and government bonds. But they’re all highly correlated. They move together,” he explains.

Offshore assets, on the other hand, offer not only geographic diversification but also structural de-correlation. “In 2023 and 2024, while the Brazilian stock market fell, the U.S. market appreciated. Even if it ended flat, with the real’s devaluation, the investor gained in dollars,” he notes, adding that “it was the right decision. The dollar went up, and so did their wealth.”

The MSX CIO agrees that this movement is already a structural trend. “Today, all our clients have some dollarized position. Some have over 50% of their wealth in hard currency. Even those just starting out already have at least 10% in dollar-linked assets,” he says.

Finally, Saravalle stresses that de-correlation is as important as returns. “Right now, the real is appreciating, the Ibovespa is rising, while foreign markets are more volatile. That’s why it’s essential to build a balanced portfolio that works across different cycles. That’s the key to long-term consistency,” he concludes.

This article was published on page 44 of Issue 43 of Funds Society Américas magazine. To access the magazine, click here!

Trump and Powell: A Relationship Full of Noise and Little Substance, For Now

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Trump and Powell relationship
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The political tension from Donald Trump, President of the U.S., toward Jerome Powell, head of the U.S. Federal Reserve (Fed), regained prominence after Treasury Secretary Scott Bessent avoided confirming whether Powell will be removed. According to experts, this is a new chapter in a story we’ve been hearing for just over a month. Just last week, these same rumors disrupted the markets.

“Despite the tense backdrop with the Fed, Bessent avoided giving opinions on the possible dismissal of Chairman Jerome Powell, whose term ends next May, hinting that the final decision lies solely with President Trump. However, recent reports from The Wall Street Journal stated that Bessent had privately warned Trump about the negative impact on markets if Powell were removed—something the president emphatically denied through his official account on X, insisting that ‘no one explains anything to him’ and taking personal credit for the market’s record highs,” says Felipe Mendoza, financial markets analyst at ATFX LATAM.

In this context of pressure on the Fed, financial markets tend to react initially to headlines by taking refuge in defensive assets such as U.S. Treasury bonds and gold, while the U.S. dollar weakened and stocks experienced brief volatility before stabilizing following Trump’s clarification. According to UBS, prediction markets assigned a probability of approximately 21% that Powell will not continue in his position in 2025. Furthermore, the dollar has recently reached its lowest level in three years, weakened by headlines about a potential early leadership change at the Fed.

“While we continue to consider the probability of a change in Fed leadership to be low, recent events have drawn increased attention from policymakers and investors. Although the situation remains speculative, global investors should take into account the possible implications of a challenge to the Fed’s independence, the legal considerations for removing its chair, and the political implications for monetary policy,” UBS states in its report.

The Consequences
According to the document, a move to dismiss the Fed chair could raise doubts about the long-term credibility of U.S. monetary policy and about the Fed’s independence, which has historically been considered a fundamental pillar of the financial system. “This comes at a time when there are already concerns about the U.S.’s fiscal sustainability, inflation, and the dollar as a store of value. Such an event could lead investors to demand higher risk premiums on U.S. public debt, especially if it generates greater uncertainty about inflation or interest rate policy. Aggressive rate cuts under political pressure might not translate into lower yields across the curve, as investors could begin to anticipate greater inflationary risks. These developments could also negatively affect the U.S. dollar’s role as a global reserve currency,” warns UBS.

In the opinion of Deborah Cunningham, Chief Investment Officer for Global Liquidity at Federated Hermes, one of the many costs of President Trump’s attacks on Fed Chair Powell is presenting monetary policy as black or white, with no middle ground. “It might have seemed that way decades ago. Before Chair Bernanke opened it up to the public, the Federal Reserve was a black box. It communicated mainly through Federal Open Market Committee (FOMC) statements and daily market operations, rather than through speeches, press conferences, and congressional testimony. But monetary policy is as gray as anything in economics, involving both opinion and data,” she explains.

In her view, Trump’s tirades also drain healthy debate about the central bank. “Had he not issued a rant after the FOMC held rates steady last month, the main story could have been a growing unease among officials. It actually should be. No participant dissented from the decision, but the June Statement of Economic Projections (SEP) changed subtly compared to March’s, suggesting a possible split. While the median federal funds rate remained at 3.9%—implying two quarter-point cuts this year—seven voters indicated zero cuts, compared to four in March,” Cunningham adds.

Their Different Points of View
According to the Market Flash from Edmond de Rothschild AM, beyond the pretext of poor management of the bank’s renewal plans, the episode illustrated two radically opposing views on U.S. inflation and growth. “On the ‘rear-view mirror’ side, we find Donald Trump and the candidates to succeed Jerome Powell as Fed Chair. With inflation trending toward 2%, they advocate for urgent rate cuts to halt the economic slowdown and deteriorating labor market. The ‘windshield’ side, which includes Adriana Kugler, a Powell supporter and member of the Fed’s Board of Governors, encourages the bank to keep rates where they are, as tariffs should push inflation above 3% by the end of 2025,” they explain in their report.

The financial institution is anchored in a “wait-and-see” stance pending the impact of the new trade policy of the Trump Administration. According to Edmond de Rothschild AM experts, the Fed had expected the trade war to have only a fleeting effect on inflation, but Donald Trump’s recent announcements—delaying the 200% tariffs on pharmaceuticals until 2026—could prolong the impact and cause a de-anchoring of long-term inflation expectations.

“The data seem to suggest that Jerome Powell’s side is right: weekly jobless claims, excluding seasonal effects, indicate that the economy is at a cyclical high, yet showing resilience. Consumer spending remains strong: retail sales have rebounded sharply after a disappointing start to the year. The latest CPI reading revealed a significant increase in goods inflation, particularly in areas sensitive to tariffs like electronics, although overall inflation still appears to be under control thanks to shelter trends. Donald Trump expected that the tariff hikes would be absorbed by exporters to the U.S., but the fact that import prices have only fallen slightly suggests that U.S. businesses are bearing most of the increases,” they note.

Surge in Flows to Active ETFs in the First Half of 2025

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Surge in active ETF flows in 2025
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Global assets in actively managed ETFs reached $1.48 trillion by June, representing a growth of 26.7% during the first six months of the year, according to the latest data published by ETFGI. This figure was driven by inflows that also broke new records: $46.77 billion in June alone, which raised the cumulative net inflows for the year to a record $267.02 billion, according to the report.

Subscriptions to actively managed ETFs are gaining increasing relevance relative to overall inflows in the total ETF market. According to figures published by ETFGI, investment flows into exchange-traded funds totaled $897.65 billion in the first half of the year, $167.29 billion more than in the same period last year, a 22.9% increase. Of the investment inflows into ETFs from January to June, a total of $267.02 billion corresponded to actively managed ETFs, an amount $112.98 billion higher than in the first half of 2024, or in other words, 73% higher.

Therefore, inflows to actively managed ETFs this year already represent 29.7% of total ETF subscriptions, compared to 21% during the same period last year. At the end of 2024, this percentage stood at 19.9%. The positive market performance also lifted the assets of actively managed ETFs worldwide.

Regarding the industry composition, by the end of June, there were 3,805 actively managed ETFs listed globally, managed by 573 providers and traded on 42 stock exchanges across 33 countries.

Flow Dynamics
 Analyzing June’s flows, it stands out that actively managed equity ETFs, listed worldwide, recorded net inflows of $24.65 billion, bringing the total accumulated for the year to $148.98 billion, surpassing the $89.35 billion registered in the same period of 2024.

For actively managed fixed income ETFs, net inflows of $20.51 billion were reported in June, reaching accumulated inflows in 2025 of $102.6 billion, “well above the $54.49 billion recorded up to June 2024,” explain ETFGI. They indicate that the substantial inflows can be attributed to the 20 actively managed ETFs with the highest net flows, which together captured $19.7 billion during June.

Two recently launched JPMorgan ETFs, the JPMorgan Mortgage-Backed Securities ETF (JMTG US) and the JPMorgan Active High Yield ETF, led the inflow rankings. The former recorded $5.78 billion in inflows.

Strong investment inflows are notable in collateralized debt ETFs, such as the Janus Henderson CLO AAA ETF, which registered subscriptions of $876 million last month. It is the largest CLO ETF in the world, with over $21 billion in assets under management. This year, it has already received flows close to $5.2 billion.

Interest in dividend ETFs is also remarkable, such as the Capital Group Dividend Value ETF, which received investment inflows of $835.9 million in June alone, raising its subscriptions this year to $4.524 billion.

The Private Equity World is Increasingly Interested in RIAs

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Private equity interest in Rías
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Driven by increased mergers and acquisitions (M&A) activity, the ecosystem of Registered Investment Advisor (RIA) firms has matured, developing new strategies, products, and therefore, growth opportunities. This dynamic, according to research firm Cerulli Associates, has caught the attention of major private equity firms, heightening their interest in taking part in the boom of this business.

The report, titled “The Cerulli Edge—The Americas Asset and Wealth Management Edition,” highlighted that there are over 18,000 RIAs focused on retail investors, boosting the potential for growth and scalability. According to a press release, new players are entering the market, including some of the largest private equity investors. The goal: to gain access to these increasingly important distribution channels.

Five years ago, Cerulli noted, private equity’s involvement with the RIA channel was limited to top-tier firms. However, as more opportunities have emerged in the market, more investors are seeking to deploy capital to help RIAs grow. As a result, competition has intensified for the fastest-growing advisory firms, creating bidding wars and larger-scale deals.

Moreover, despite higher interest rates and the 2022 market downturn, sector valuations have remained high.

Activity isn’t heating up solely in the large-firm segment, the report adds. While mega-deals still represent significant and growing opportunities for private equity in the RIA space, investors continue to be “very active” in segments with lower AUM, targeting firms with $2 billion to $3 billion in assets.

Given the size of the market, Cerulli emphasized that the trend still has room to grow.

Support and Competition

Given the rising interest in the sector, Cerulli stresses that private equity investors must add meaningful value to help their portfolio RIAs grow quickly.

“Core interest in RIAs remains strong, with stable revenues supported by tight-knit investor relationships, a high-growth area in wealth management, and a market composed predominantly of smaller, fragmented players,” said Stephen Caruso, Associate Director at Cerulli, in the press release.

“To better realize that growth potential, however, investors need to be prepared to support the RIAs in their portfolios, which may include backing future M&A transactions, guiding the executive team through periods of change, or developing the brand as a buyer,” he added.

Due to the attractiveness of the RIA space, Cerulli notes that private equity firms now face increasing competition from minority investors and private credit providers.

Retail investors, in particular, are seasoned industry participants with longer investment horizons. “Minority investors tend to have a more patient approach, allowing RIAs to grow without the pressure to scale quickly for an exit,” Caruso explained.

Additionally, the private credit industry has also entered the scene, offering valuable support to growth-oriented firms. “Private credit is becoming increasingly attractive to RIA channels as a non-dilutive form of capital. As firms weigh the cost of capital, those wanting to maintain control now have another option, with more providers entering the market,” the executive said.

SMBC hires Nick Stevenson

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Fracaso de la política económica global
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The Sumitomo Mitsui Banking Corporation (SMBC) Americas Division has appointed Nick Stevenson as Group Head of Technology, Media, and Telecommunications (TMT) Corporate and Investment Banking (CIB). 

Based in New York, Stevenson will focus on expanding SMBC’s TMT business and will lead a team of bankers serving clients across the sector. He will report to CIB Co-Heads Stephanie Bowker and Yoshiyuki Natsuyama.

The appointment aligns with SMBC’s broader strategy to grow and diversify its corporate and investment banking platform in the Americas.

Stevenson brings more than 30 years of CIB experience, including 24 years at RBC Capital Markets, where he most recently served as Global Head of Media, Communications, and Entertainment Investment Banking. He also held senior roles at Bank of America and Citi earlier in his career.

“Nick’s industry relationships and deep knowledge of the TMT sector will continue to enhance our client franchise,” said Richard Eisenberg, Co-Head of Coverage and Capital Markets, SMBC Americas Division. 

Island Secures Investment in $5 billion Series E Round

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Enterprise browser company Island has added J.P. Morgan Private Capital Growth Equity Partners as a strategic investor in its Series E funding round, which was led by Coatue Management and values the company at nearly $5 billion. 

“Their [J.P. Morgan Growth Equity Partners’] support highlights how the Enterprise Browser solves organizations’ most complex, large-scale challenges in banking and beyond,” said Island CEO and Co-founder Mike Fey. 

The funding will support the Island’s continued product development, with a focus on expanding security, governance and user experience features tailored to enterprise IT and security teams. The company’s browser is used by over 450 enterprise clients, including six out of the ten largest U.S. banks. 

Island’s technology embeds security and compliance features directly into the browser, allowing organizations to control data access and monitor user activity without additional tools. The company has seen adoption across financial services, healthcare, government and other regulated sectors.

J.P. Morgan Growth Equity Partners, part of J.P. Morgan Asset Management, focuses on growth-stage investments in software, AI, cybersecurity and fintech. 

“Cybersecurity is a top strategic priority for the world’s largest enterprises,” said Paris Heymann, Co-Managing Partner of J.P. Morgan Growth Equity Partners. “We’re thrilled to support a pioneering company like Island in this space.” 

Ocorian expands its US presence with new appointment

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Global asset services provider Ocorian has appointed Deborah Buscema as Commercial Director for its U.S. funds business, further strengthening its North American sector. Based in New York, Buscema will report to Markus Jolic, Head of Sales Excellence and support the firm’s commercial growth across key markets. 

“The commitment to expansion and customer service excellence at Ocorian makes it an exciting time to be joining the company and I look forward to working with existing and new clients,” said Buscema. 

The announcement comes shortly after Ocorian signed an agreement, pending regulatory approval, to acquire the Fund Solutions division of Element 78 Partners LLC, a Chicago-based professional services provider. The acquisition is expected to enhance Ocorian’s fund servicing capabilities and client reach in the U.S.

Buscema brings over two decades of experience in senior business development roles. She most recently worked at Cority Software Inc. and previously held leadership positions at Apex Group and BNP Paribas, serving investment managers across the U.S., Canada, and Latin America. 

“Deborah’s extensive experience and deep expertise will be a significant asset to our funds business, supporting Ocorian’s continued growth in this strategically important area,” added Jolic. 

Avenue Sees a Future with More Internationalization Amid Wealth Transition in Brazil

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Trillions of reais abroad, seeking wealth allocation through sophisticated technological channels; Avenue foresees a major transformation in offshore investments by Brazilians in the future.

The topic was the focus of the second edition of Avenue Connection, which began on Wednesday, the 16th, in São Paulo, concentrating on the progress of international investment in Brazil, driven by the generational wealth transition.

The central theme of the event was the “Wealth Diaspora,” a concept that guided discussions on global allocation, changes in investor profiles, and new financial advisory structures.

At the opening conference, Daniel Haddad, Chief Investment Officer of Avenue, emphasized the urgency of diversification. “We are facing a real wealth diaspora. This capital needs to be planned with a long-term vision and geographic diversification,” he stated. According to him, “investing abroad is no longer a choice between alternatives, but a necessary component to preserve wealth against the loss of purchasing power of the local currency.”

This assessment is based on data from UBS, which estimates that $124 trillion will change hands by 2048 in the largest wealth transfer in history. Brazil ranks as the second-largest market in this process, with $9 trillion in transition.

Roberto Lee, CEO of Avenue, stated: “We are only at the beginning of what I call a great Brazilian wealth diaspora. We want to lead this movement, transform the market, and finally build a structural allocation abroad here. This is something that will have an impact for decades.” According to him, the change will be driven by the new generations. “For them, investment advisors who cannot offer products abroad are irrelevant.”

Lee also shared data about the profile of investors on the platform. As of 2023, over 80% were under 45 years old, with approximately one-third between 18 and 30 years old. “These young investors are making their first contributions directly into publicly traded companies in the United States. Instead of accumulating their savings in Petrobras shares, they are investing in companies like Nvidia, Tesla, Google, and Coinbase,” he said.

Another key point of the event was the advocacy for the fee-based advisory model, in which the professional is compensated with a percentage of the invested volume. “I don’t know if it will be next year or the year after, but fee-based will be dominant here. For us, this is already strategic in day-to-day operations, and we are building the entire infrastructure to be the best partner for anyone who wants to lead this change,” said Lee.

T. Rowe Price and SurgoCap Partners Lead iCapital’s Capital Raise

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iCapital’s latest capital raise brought in two new investors, joining follow-on investments from familiar faces to the fintech, helping the raise surpass $820 million. The round was led by T. Rowe Price and hedge fund SurgoCap Partners.

According to a press release, the round also included additional participation from State Street and increased commitments from three of the company’s long-standing backers: Temasek, UBS, and BNY. Altogether, this raised the company’s valuation to over $7.5 billion.

The capital will be used, according to the statement, to accelerate iCapital’s global acquisition strategy, geographic expansion, and technological innovation.

“The resources from this capital raise will be strategically deployed to accelerate our acquisition efforts, with a focus on enhancing our technology platform and expanding our data capabilities,” said Michael Kushner, Chief Financial Officer of the fintech, in the press release.

This marks a continued path of consolidation for iCapital, which was founded in 2013. In total, the company noted it has invested over $700 million into its platform and completed 23 strategic acquisitions, including recent purchases of Mirador, AltExchange, and Parallel Markets.

Currently, iCapital has $945 billion in assets under service globally on its platform. This includes $257 billion in alternative assets, $203 billion in structured investments and pending annuities, and $485 billion in client assets.

Moreover, the fintech emphasized that the last 12 months have seen a surge in global activity on its platform, with the number of funds rising to 2,100 and the number of financial professionals using the platform increasing to 114,000.

“This capital raise reflects our investors’ enthusiasm for the opportunity we have to transform the investment experience,” said Lawrence Calcano, Chairman and CEO of iCapital.

The capital round included Goldman Sachs as financial advisor and placement agent, while legal counsel was provided by Ropes & Gray.

Nymbus Integrates Bud Financial’s AI-Powered Tools

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Nymbus announced its partnership with Bud Financial to enhance its digital banking services. Bud will provide its financial management tools directly within the Nymbus platform. 

With Bud’s widgets integrated, financial institutions can give customers a clearer view of their finances, deliver more relevant tools and content, and personalize experiences across digital channels. The goal is to help banks go beyond basic digital services and offer smarter, more engaging interactions. 

This move supports Nymbus’ broader strategy following the launch of Nymbus Engage, a solution designed to help banks use customer data more effectively and build deeper relationships. 

“Together, we’re enabling their clients to move beyond legacy data into a new era of intelligent, insight-driven banking,” said Edward Maslaveckas, CEO at Bud. 

Bud, which has applied AI to financial data since 2015, helps institutions structure raw transaction data into actionable intelligence. The move positions Nymbus to serve community financial institutions better, looking to modernize their digital infrastructure and compete through smarter, data-led engagement strategies. 

“This integration supports our mission of providing banks and credit unions with the tools they need to grow, differentiate and deliver modern, personalized banking experiences,” said Jeffery Kendall, CEO and Chairman at Nymbus.