DAVINCI TP Announces a Strategic Alliance with Brookfield Oaktree Wealth Solutions

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Strategic alliance of DaVinci TP
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Brookfield Oaktree Wealth Solutions, a global provider of alternative investments, is expanding its presence in the wealth management sector in Latin America, with DAVINCI Trusted Partner leading support and marketing efforts for private placement in Argentina and Uruguay, both firms announced in a statement.

DAVINCI Trusted Partner announced its strategic alliance with Brookfield Oaktree Wealth Solutions to offer alternative investment solutions to financial advisors and private banking in Argentina and Uruguay. Brookfield Oaktree Wealth Solutions’ parent company, Brookfield, manages approximately $1 trillion in assets, with a distinguished track record and notable expertise in Real Estate, Infrastructure, Private Equity, Credit, and Renewable Power & Transition.

“We view DAVINCI as an extension of our support team in Latin America. We are fortunate to partner with them as they share our commitment and passion for serving our clients in the region,” said Oscar Isoba, Managing Director and Head of LatAm at Brookfield Oaktree Wealth Solutions.

“The combination of Brookfield Oaktree Wealth Solutions’ global scale with DAVINCI’s local expertise will enable us to offer our investment capabilities to wealth advisors and private banks in the region, with a focus on education about alternative investments and how advisors can position these unique strategies in their clients’ portfolios. We are very excited to bring these solutions to Argentine and Uruguayan investors, and we look forward to expanding our reach to other countries in the region,” Isoba added.

Santiago Queirolo, Managing Director of DAVINCI Trusted Partner, highlighted: “We are fully committed to our clients, and our main objective is to help financial institutions assess the best investment solutions available in the market. There is growing interest in alternative investments in the wealth management sector, seeking to diversify traditional portfolios and enhance long-term returns. With this strategic alliance with Brookfield Oaktree Wealth Solutions, we will help financial institutions navigate the alternative investment universe with the goal of educating while introducing the best alternative investment solutions.”

“We are very excited about this alliance with Brookfield Oaktree Wealth Solutions, one of the most prominent firms in the credit and private assets market. This agreement will allow us to offer the best alternative investment solutions to intermediaries in Argentina and Uruguay,” said James Whitelaw, Managing Director at DAVINCI TP.

DAVINCI Trusted Partner specializes in the independent distribution of investment funds in Latin America, providing access to investment solutions from leading global managers. With a highly experienced team and deep knowledge of the regional regulatory framework, it offers specialized consulting to financial intermediaries, establishing itself as a trusted partner in the region.

Brookfield Asset Management is a global alternative asset manager. It invests clients’ capital for the long term, with a focus on real assets and essential service businesses that form the backbone of the global economy. It offers a wide range of alternative investment products to clients worldwide, including public and private pension plans, endowment funds and foundations, sovereign wealth funds, financial institutions, insurance companies, and private wealth investors.

Interview with Alberto Burs (Inviu): How alternative assets and technology are redefining the industry  

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Activos alternativos y tecnología
Photo courtesyAlberto Burs, Offshore Vice President at Inviu

Asset management has undergone substantial transformations in recent decades, driven by technological advancements, globalization, and the evolution of financial markets. Today, the industry faces an increasingly dynamic environment, with investors demanding not only attractive returns but also sustainable and responsible strategies. In this context, adaptability and innovation are key to addressing future challenges.

As part of the Key Trends Watch, a joint initiative by FlexFunds and Funds Society, the aim is to provide insight into the changes and challenges in the asset management industry through the perspective of leading professionals. This time, we spoke with Alberto Burs, Offshore Vice President at Inviu, about emerging trends, sector challenges, and opportunities.

Alberto Burs was appointed Offshore Vice President at Inviu in March 2024, where he leads the development of the international business and provides services to financial advisors in several Latin American countries. With over a decade of experience in the sector, he was previously Sales Manager at Compass Argentina and worked as an independent financial advisor. He holds a degree in Public Accounting and Business Administration from the Pontifical Catholic University of Argentina and a master’s degree in Finance from the University of Torcuato Di Tella.

For Burs, Inviu is a project that has redefined his professional career. “I was invited to join and discovered a completely new vision of the industry. At Inviu, we are doing something unique. Perhaps XP in Brazil has developed something similar, but there is nothing like this in the region.” He highlights that, thanks to the backing of Grupo Financiero Galicia and an innovative technological platform, Inviu has positioned itself as a leader within its industry in Argentina, and its next goal is to expand this offering to the rest of Latin America.

Regarding the main challenges he faces as VP Offshore at Inviu, Burs emphasizes that one of the most important is the resistance of advisors to change their traditional platforms. “The main challenge is convincing advisors, who have been working with the same broker for 10 or 15 years, to try something new. We know that once they try our platform, the service they offer their clients will improve significantly.”

The Inviu platform is the core of their offering. Burs explains that integration with Pershing and Interactive Brokers allows them to offer advisors unified access to both local and offshore markets, something that in countries like Argentina provides great added value. “Technology is our differentiator. It not only enables the integration of markets and the various investment banks we have agreements with but also prepares the platform to include new trends like crowdfunding and cryptocurrencies.”

Main trends

The expert points out that alternative assets are gaining prominence, especially after the challenging year of 2022, when both stocks and bonds fell without offering any refuge. “The alternative world has solidified as a key asset class for diversifying portfolios. Today, the correlation between bonds and stocks is high, so having alternatives is essential.”

While he acknowledges that retail market allocation to alternative assets is still low, he believes it could increase to as much as 20-30% without affecting portfolio liquidity. “Private credit is one of the strategies with the most appetite due to the attractive risk-return it offers compared to public fixed income.”

“I believe there are two key factors that clients prioritize today: risk and liquidity. However, the importance of liquidity is gradually decreasing, which is leading to the resurgence of the world of alternative assets,” he adds regarding the factors most important to clients.

When asked about the future of the industry, Burs highlights the growing relevance of separately managed accounts (SMAs) over collective investment vehicles. “Managed accounts allow advisors to delegate decisions to professionals, with a more personalized and flexible approach than mutual funds or ETF portfolios.”

He also firmly believes that technology will transform the way small investors access global markets. “Technology will allow any investor, regardless of size, to invest in assets such as bonds, stocks, SPVs, real estate, or cryptocurrencies. This is the future of asset management: a platform that integrates all investment options. This is where we want to go with Inviu.”

The role of artificial intelligence in the sector   

Burs is also optimistic about the impact of artificial intelligence on the sector. “I believe AI will be useful, but it will not replace advisors. It will be key for investment strategies and, above all, for helping to accurately identify clients’ risk profiles, avoiding unpleasant surprises during times of volatility.”

The asset management sector continues to evolve rapidly, driven by technological innovation and the growing demand for diversified and accessible investment products. Burs and his team at Inviu are at the forefront of this transformation, leading with a platform that promises to integrate all investment alternatives in one place and with a clear vision that the future lies in adapting to new trends and investor needs.

Interview conducted by Emilio Veiga Gil, Executive Vice President of FlexFunds, as part of the Key Trends Watch by FlexFunds and Funds Society.

High yield bonds: An unprecedented contraction

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Bonos de alto rendimiento
Pixabay CC0 Public Domain rus-burkhanov from Pixabay

Since the end of 2021, the high yield bond markets have weathered an unprecedented storm. The sudden change in the interest rate regime left its mark, and the ICE BofA BB-B Global High Yield Index saw its value plummet by $654 billion, reducing its size by more than a quarter, from $2,510 billion to $1,856 billion[1].

Why such a contraction? There are three main factors that explain this earthquake in the high yield space.

Firstly, rising interest rates have prompted many companies to reduce their debt levels, preferring to focus on stability rather than expansion through mergers and acquisitions or share buy-backs. This caution has led to a reduction in the supply of new bonds.

Secondly, the best-rated companies in the high yield segment have sought to improve their ratings in order to move into the investment-grade category and thus benefit from more advantageous debt costs.

Thirdly, rate hikes have increased default rates, as some indebted companies are no longer viable in the current environment.

Looking ahead, we expect this trend to continue, albeit at a slower pace. Businesses, though less inclined to take on debt, are beginning to adopt behaviors that could generate a positive net credit supply. However, private debt, offering higher rates, is increasingly competing with high yield bonds, exacerbating the scarcity of supply. In Europe, some companies shine like “rising stars”, but in the United States, opportunities are more limited, requiring greater selectivity. Default rates are likely to remain high, as companies face higher refinancing costs.

How can investors navigate this tumultuous environment? We recommend three rules:

  1. Focus on fundamentals: in an uncertain macroeconomic environment, it’s crucial to stay focused on fundamentals and prepare for greater dispersion.
  2. Move from beta to alpha: as credit spreads tighten, now is the time to focus on active, alpha-seeking strategies, rather than passive ones.
  3. Favoring a global approach: in a contracting market, investors should broaden their investment universe and favor a global approach, enabling greater diversification and more opportunities.

 

Candriam Bonds Global High Yield: Our tailor-made solution

Our fund, Candriam Bonds Global High Yield, is designed to exploit the unique opportunities offered by high yield bonds. Through sector and maturity diversification, this fund aims to outperform investment grade bonds. Faced with higher default rates, the expertise of our dedicated team of analysts is essential to navigate this complex market.

Our strategy is based on three pillars:

  1. Global vision: we cover the two largest markets (USA and Europe) and a wide range of instruments (high yield, investment grade, fixed and floating rate bonds, derivatives).
  2. Active management: our positions are actively managed, with strong convictions based on in-depth fundamental, legal and quantitative analysis.
  3. Prudent risk management: we apply rigorous risk management, closely monitoring liquidity, sovereign, extreme, volatility and credit risks. We also use asymmetrical products, such as options, to hedge our positions.

 

Our selection of issuers is based on rigorous fundamental research incorporating ESG factors. Each issuer receives an internal credit rating, enabling us to assess its creditworthiness and default risk, with particular attention paid to extra-financial criteria.

We go beyond traditional investor boundaries by exploring opportunities between the investment grade and high yield segments. This flexibility enables us to dynamically adjust the overall duration of our portfolio to suit different market conditions.

In times of uncertainty, our in-house legal expertise and understanding of the intricacies of contractual provisions are essential to managing risk. The important thing is not to take any ill-considered risks. The result of our risk approach is a zero default rate.

The world is increasingly dominated by key trends, such as digitalization, bipolarization and decarbonization, which are profoundly transforming economic relationships and are likely to significantly disrupt financial markets. Combined with the interventions of central banks that may be pursuing policies counter to the fiscal policies of governments, these trends are a source of concern for investors and are creating volatility in the money and bond markets.

In such a context, outperformance will depend on diversification, selectivity and active management to maintain a controlled and calibrated investment risk . We remain focused on finding promising opportunities, supported by rigorous fundamental research that integrates ESG factors. The harmonious collaboration between our portfolio managers, ESG analysts and credit analysts has been key to our success in managing high yield bond strategies over the past twenty years.

 

 

 

Opinion article by Nicolas Jullien,Head of High Yield & Credit Arbitrage at Candriam. 

 

 

 

 

 

 

[1] Source: Bloomberg©, ICEBofA BB-B Global High Yield (HW40) index in USD. Data compared between the end of 2021 and August 2024, at market value.

The U.S. Real Estate Market Needs More Fed Rate Cuts to Boost Supply and Affordability

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Fed Rate Cuts Will Ease Pressure on U.S. Real Estate Market, but Mortgage Rates Unlikely to Fall Below 5% Before 2027, According to Fitch Ratings

The 30-year fixed mortgage rate and the 10-year Treasury yield have already priced in the Federal Reserve’s 50 basis point rate cut. Even with additional rate cuts, a decline in the 30-year mortgage rate to around 5% depends on the spread with the 10-year Treasury bond returning to the pre-pandemic average of 1.8 percentage points.

Fitch analysts note that the 10-year yield has less room to fall following rate cuts, especially after this summer’s declines in anticipation of monetary policy easing. They expect the 10-year yield to end 2026 around 3.5%, down slightly from its current level of around 3.7%. A 3.5% 10-year Treasury yield plus the historical average spread of 1.8 percentage points results in a mortgage rate of around 5.2%.

The spread between the 30-year mortgage rate and the 10-year Treasury yield has widened relative to the historical average since the Fed began raising policy rates in March 2022. This reflects a higher prepayment risk and the Fed’s reduction in its holdings of mortgage-backed securities (MBS). The spread peaked near 3% in November 2023 when the average 30-year fixed mortgage rate reached a cycle high of 7.8%. It has since narrowed slightly, averaging 2.6 percentage points since January 2024.

Demand Remains Above Averages

Housing demand, as measured by homes sold above the list price and the average sale price relative to the list price, has softened since August 2023 but remains above long-term averages. A further decline in mortgage rates will help improve affordability and support demand, but low inventory will likely constrain home sales until rates approach 5%.

Around 24% of outstanding mortgages have rates above 5%. As mortgage rates approach that figure, likely by 2026, homeowners with these higher-rate mortgages, along with those with rates between 4% and 5% (around 19% of outstanding mortgages), should become more willing to sell their homes and take on a new mortgage, according to Fitch Ratings.

Housing Supply Needs to Improve

According to Fitch, “Total U.S. inventory has broadly increased this year, but it remains below pre-pandemic levels, driven by a 27% drop in existing home supply since February 2020. While the new home inventory has grown by 29% since the start of the pandemic, the supply of existing homes, which accounts for roughly 80% of home sales, needs to improve in order to enhance pricing and market activity.”

Mortgage originators are already benefiting from higher volumes as refinancing activity has gradually recovered with the decline in mortgage rates. Homeowners with mortgage rates above 6%, representing 14% of outstanding mortgages or roughly $1.5 to $2 trillion, are in a prime position to refinance as the average 30-year rate approaches 6%.

BNP Paribas Signs Agreement with HSBC to Acquire Its Private Banking Activities in Germany

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prueba 3

BNP Paribas has announced the signing of an agreement with HSBC to acquire its private banking activities in Germany. The deal aims to position BNP Paribas Wealth Management among the leading players in Germany and raise the amount of assets under management to over 40 billion euros (around 45 billion dolars).

Germany, a key geography for BNP Paribas, offers significant growth potential for wealth management activities, particularly within the “mittelstand” segment (German SMEs), as well as with entrepreneurial clients and German families. Leveraging BNP Paribas’ diversified and integrated business model, BNP Paribas Wealth Management aims to provide these entrepreneurial clients with a comprehensive service offering, ranging from investment and corporate banking to asset management, drawing on BNP Paribas’ well-established franchises.

HSBC’s private banking activities, primarily focused on HNW and UHNW clients, and with a complementary regional presence, especially in North Rhine-Westphalia, fit perfectly within BNP Paribas Wealth Management’s model. This will allow BNP Paribas to rank among the top wealth managers in the country, according to the statement from the French firm.

BNP Paribas Wealth Management, part of the Investment and Protection Services division, is the leading private bank in the eurozone, with global assets of 446 billion euros (498 billion dolars) as of the end of June 2024.

The transaction is expected to close in the second half of 2025, pending regulatory approvals.

“This acquisition is a crucial step in positioning BNP Paribas Wealth Management among the leading players in Germany, where we believe our model is best suited to meet the long-term needs of entrepreneurial clients, leveraging the Group’s strong franchises to meet both their personal and corporate needs. It will, therefore, contribute to consolidating our position as the leading wealth management player in the eurozone,” said Vincent Lecomte, CEO of BNP Paribas Wealth Management.

Lutz Diederichs, CEO of BNP Paribas Germany, added, “Germany is a key strategic market for BNP Paribas, with a local presence of over 75 years. Our twelve business lines make our business model one of the most diversified and resilient in the German banking sector. Developing our wealth management franchise is an integral part of our growth plan in the German economy. Wealth Management in Germany serves as a gateway for our clients to the full range of services offered by the BNP Paribas Group, particularly in Corporate & Institutional Banking, Real Estate, Asset Management, and Securities Services.”

New Interest Rate Environment, Capital Preservation, and Meeting Family Expectations: The Three Priorities of Family Offices

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Following the stock market rally in 2023, family offices are shifting their portfolios, reducing cash holdings, and positioning in risk assets with the expectation of gains in the coming year, according to Citi Private Banking’s report, *Global Family Offices 2024. Survey Insights*.

“We are delighted to share the results of this year’s survey, which offers an inside look at the investments and priorities of some of the most diverse and sophisticated family offices in the world. Over the last two years, we have seen the number of participants grow from 126 to 338 globally, highlighting the increasing need for unique perspectives on the main challenges and opportunities family offices face today. The broad-ranging questions cover the most current global topics, revealing significant shifts in concerns and interests. We look forward to continuing our close collaboration with family offices to provide access to all areas of Citi that support the ambitious goals and needs of the world’s most global and sophisticated investors,” said Hannes Hofmann, Head of Citi Private Bank’s Global Family Office Group.

**Top Concerns for Family Offices**

The survey results show that the preservation of asset value is the top concern for families, followed closely by preparing the next generation to be responsible stewards of their wealth.

Citi highlights that this underscores the dual priorities of family leaders: preparing wealth for their families and preparing family members to manage that wealth. Furthermore, the adoption of formal governance systems is uneven among family offices. While over two-thirds have governance systems for investment functions, less than half rely on formal governance for other family office and family-related matters.

“While family offices are inherently unique, our survey demonstrates that there are many similarities in their concerns and behaviors. Findings like these reveal the new ways they are managing their wealth, diversifying portfolios, and implementing sophisticated investment approaches while preparing families to achieve both financial and familial well-being,” emphasized Alexandre Monnier, Head of Family Office Advisory for Citi Private Bank’s Global Family Office Group.

Key Findings

Amid ongoing market volatility and geopolitical challenges, the report highlights key challenges and areas of potential opportunity for the year ahead. Among the most notable conclusions of this year’s edition is that asset preservation and preparing the next generation for future responsibilities are top concerns for families. Respondents also noted that meeting family members’ expectations is their biggest challenge.

The report reflects how family office portfolios are shifting and what concerns investors have. “Family offices are moving cash into significant portfolio changes, shifting from liquid resources to fixed income and both public and private equity,” the report concludes.

Additionally, there has been an increase in exposure to artificial intelligence, which “likely contributed to the strong returns last year.” However, the report notes that the adoption of AI technology in family office operations remains slow.

A notable finding is the continued optimism about portfolio performance over the next 12 months, with 97% of respondents expecting positive returns. However, the report shows that the future of interest rates is the primary concern, followed by geopolitical issues such as U.S.-China relations and the conflict in the Middle East.

Regarding the family office business itself, the report confirms that investment approaches are becoming more sophisticated. Sixty percent of family offices now have investment teams led by a CIO, investment committees, and formal investment policy statements, with a strong commitment to alternative asset classes.

“As they professionalize, family offices are increasingly collaborating with external partners. Investment management (54%) and reporting (62%) are the only two services most family offices manage internally; all other services are either outsourced or handled jointly,” the report points out.

The report also revealed changes in portfolio allocations. Equities and fixed income saw an increase in their weightings, rising from 22% to 28% and from 16% to 18%, respectively. Private equity declined from 22% to 17%, potentially due to delayed revaluations compared to public equities. North America received the highest allocations (60%), followed by Europe (16%) and Asia-Pacific excluding China (12%). Allocations to China nearly halved, dropping from 8% to 5%, due to economic challenges and market uncertainty in the country. The share of North American allocations increased from 57%, driven by a strong equities market.

Expert Analysis

For Citi, it is notable that for the first time since 2021, inflation is no longer the top short-term economic concern for respondents. Instead, interest rate expectations became the top priority for more than half of respondents, followed by U.S.-China relations and market overvaluation. Concerns about the Middle East conflict are now more prominent than those regarding the war between Russia and Ukraine.

Looking ahead, sentiment towards asset classes was more positive compared to last year’s survey, with increased confidence in direct private equity, private equity through funds, and global developed market equities.

Compared to the 2023 report, positivity towards developed global investment-grade fixed income dropped from 45% to 34%, reflecting an increased appetite for risk. Regarding portfolio returns, nearly all respondents (97%) expected positive returns, with almost half anticipating returns above 10%.

“Our family office clients are becoming increasingly global as they seek to create and preserve wealth amid new challenges and opportunities in the markets. As interest rates evolve and geopolitical challenges persist, investors and their families are mobilizing their cash and shifting their portfolios towards public and private equity. Family offices are focused on the future as they navigate evolving markets around the world,” concluded Ida Liu, Head of Citi Private Bank.

The survey was launched during Citi Private Bank’s 9th Annual Family Office Leadership Program in June 2024 and later distributed to Citi’s global family office clients. With 50 questions aimed at capturing investment sentiment, portfolio positioning, family governance, and best practices, the survey received responses from 338 participants, which were included in the report.

Greater Alpha, Risk Control, and Sustainability: The Three Advantages of Enhanced Index Passive Strategies

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Récord en activos de ETFs

The passive management industry continues to innovate, this time with enhanced index strategies. Wilma de Groot, Head of Core Quant Equity and Quant Portfolio Manager at Robeco, describes enhanced indexing as a proven alternative to passive investing, combining the benefits of this popular style with higher returns and sustainability.

Robeco believes that enhanced index strategies systematically aim for excess returns while efficiently limiting risk. “Like passive strategies, these approaches are predictable, cost-effective, and transparent, but with the additional benefits of potentially delivering higher net returns and better sustainability profiles,” the firm highlights.

According to Robeco’s experience, in recent years, investors have increasingly turned to passive strategies for their core allocations. “While passive investing is popular for its predictability, transparency, and low costs, it has significant limitations, especially in times of high market valuations, geopolitical risks, and growing sustainability demands. This is why today’s investors need strategies for their core allocations that go beyond simply following the market,” Robeco argues.

In this sense, the firm defends enhanced indexing as a smarter alternative, building on the benefits of passive investing while addressing its limitations. “By utilizing proven performance factors, this approach aims to outperform benchmarks, keep costs low, and improve sustainability, all while maintaining risk levels similar to passive strategies. This makes it an attractive option for core equity and credit allocations,” Robeco states in its latest report, *The Smarter Alternative: Enhanced Indexing*.

Passive Investing Has Its Drawbacks

The report questions whether there is a smarter alternative to passive investing, as it also presents some drawbacks. For example, despite its appeal, there are compelling reasons to challenge this approach, especially for core allocations—the foundation of a portfolio designed to produce stable and consistent returns.

“Passive strategies, by nature, lag behind their benchmarks because they incur trading and implementation costs that their benchmarks do not. This can lead to significant underperformance, particularly in less liquid asset classes like credit. Passive investing also ignores decades of academic research on asset valuation, thus missing opportunities to actively exploit market inefficiencies,” the report notes. Additionally, the document highlights “sustainability issues” and the challenge that these strategies are not customizable.

Finally, the report points out another dilemma investors face today: determining where we are in the global equity market cycle and whether U.S. exceptionalism will continue. “Notably, the macroeconomic environment, characterized by high interest rates, growing geopolitical instability, and sustainability concerns, presents challenges for all types of investing. These conditions, combined with high equity market valuations and lofty earnings expectations, could lead to lower future returns,” the report comments.

Based on this analysis, Robeco argues that “a smarter alternative offering better returns with a risk profile similar to the market and greater sustainability than a passive approach can play a key role in core equity allocations, especially if investors need to preserve their risk budgets for alternative satellite investments to meet their overall objectives.”

Advantages of Enhancing Index Strategies

The first argument Robeco’s report presents in favor of enhanced indexing is its potential to deliver better returns. “Unlike passive strategies that blindly follow an index and do not favor one company over another, enhanced indexing strategically invests more in companies with stronger fundamentals while having less exposure to those with weaker fundamentals. Smarter company selection is based on forward-looking performance factors that have been empirically proven to have strong predictive power, allowing the strategy to exploit market inefficiencies to deliver better returns than the index after costs,” the report states.

Secondly, it explains that while seeking improved returns with a risk profile aligned with the index, enhanced index strategies maintain a risk-conscious stance. “Although the portfolio favors companies with stronger fundamentals, this is implemented within measured limits from a portfolio, sector, and company perspective to contain relative risks. Additionally, advanced portfolio construction ensures that the relative risk budget is used efficiently to generate sufficient returns that offset trading and implementation costs, providing returns above the index,” the document adds.

Finally, Robeco emphasizes improved sustainability integration. According to the report, enhanced indexing strategies not only favor healthier companies but also those that are more sustainable. “By definition, passive strategies are indifferent in this regard. And when passive strategies follow ESG-tilted indexes, the risk profile of those indexes can deviate significantly from their core benchmarks, for example, due to differences in sector or regional exposures. This exposes investors to the types of active risks they sought to avoid by choosing a passive strategy in the first place,” the report concludes.

The Assets Of The Largest Pension Funds Reached 22.6 Trillion Dollars In 2023

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The 300 largest pension funds in the world returned to growth in 2023, leaving much of the previous year’s decline behind. However, the assets of the largest pension funds have not yet returned to their historic peaks, according to the Global Top 300 Pension Funds report, prepared by the Thinking Ahead Institute of WTW in collaboration with *Pensions & Investments*, a leading U.S. publication on investments.

In 2023, the assets of the top 300 pension funds increased by 10%, reaching $22.6 trillion, compared to $20.6 trillion in AUM at the end of 2022. This recovery comes after a 13% drop in assets in 2022, as markets stabilized following the high level of global economic uncertainty from the previous year. According to the report, growth has been faster among the largest plans, with the world’s top 20 pension funds registering a 12% increase in assets over the last year, outperforming their smaller counterparts. This faster growth has also been sustained over time, with a compound annual growth rate (CAGR) of 5.4% for the top 20 pension funds over the last five years, compared to 4.7% for the top 300 as a whole.

Japan’s Government Pension Investment Fund (GPIF) remains the largest pension fund in the world, with $1.59 trillion in assets under management, a position it has held since 2002. However, with $1.58 trillion in assets, Norway’s Government Pension Fund, only 0.5% smaller, could take the top spot next year after recording a 22% growth in assets over the past 12 months. “While it is encouraging to see a return to growth among the world’s major pension funds in 2023, the combination of a more uncertain macroeconomic environment and rising geopolitical instability creates greater complexity in the investment landscape,” said Oriol Ramírez-Monsonis, Director of Investments at WTW, in light of the study’s findings.

WTW also explained that last year was marked by an environment of rising inflation and interest rates, which have since moderated, but the outlook remains uncertain. “While the first half of 2024 has provided some stability, uncertainty remains high, and volatility persists in the global economy, exacerbated by geopolitical events, including major presidential elections in many countries,” they said.

In Europe, the report notes that funds continue to allocate a significant portion of their investments to fixed income, at 47%, followed by equity investments, which account for nearly 40% of the allocation. This distribution marks a significant difference compared to other regions and highlights the need to continue working on diversifying strategies. “To continue making progress, it is crucial to optimize asset allocation in our portfolios, reducing investments in traditional assets. While in North America, investment in alternative assets already reaches nearly 30%, in Europe, we have yet to surpass the 15% threshold, leaving us ample room for improvement and growth,” concludes Ramírez-Monsonis.

Luis Buceta, New President of CFA Society Spain

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CFA Society Spain, the local member society of CFA Institute – the Global Association of Investment Professionals – has appointed Luis Buceta, CFA, as its new president. This announcement follows the conclusion of the current term, in accordance with the organization’s statutes, previously held since October 2020 by José Luis de Mora Gil Gallardo, CFA. Buceta will lead a team of distinguished professionals who will join him on the Board of Directors of the Spanish Chapter of CFA Institute.

Luis Buceta is currently the Chief Investment Officer of Creand WM in Spain (Crèdit Andorrà Financial Group). He previously worked for BNP Paribas Wealth Management as Director of Equity Investments, and began his career at The Chase Manhattan Bank. Over the past four years, Buceta has also served as Vice President of CFA Society Spain.

In addition to his professional role, the new president combines his work with teaching, as he is a professor at various business schools and universities. He holds a degree in Economics and Business Studies and Market Research and Techniques from ICADE (E2 and ITM). He also has an Executive MBA from IESE Business School and certifications in CFA ESG Investing and Certified Advisor (CAd).

Among the main objectives of the new team are to continue strengthening the prestige and growth of the CFA professional accreditation in Spain and to meet the new needs of investment professionals by providing access to innovative certifications such as the Certified Advisor CAd Program, CFA Institute Certificate in ESG Investing, Climate Risk, Valuation and Investing Certificate, Private Markets and Alternative Investments Certificate, Data Science for Investment Professionals Certificate, and Private Equity Certificate.

At the local level, relationships with all stakeholders of CFA Society Spain will continue to be strengthened, including members, CFA candidates, employers, regulatory and supervisory bodies, and partner firms. The activities of all the Committees within CFA Society Spain will also be reinforced, particularly in the areas of private/alternative markets, sustainability, diversity, wealth management, relationships with Latin American professionals, education, communication, investment performance measurement (CIPM), regulatory affairs, asset management, and digital assets.

The fundamental goal is to promote excellence among investment professionals in Spain and to advance the financial sector for the benefit of Spanish society as a whole.

Luis Buceta, CFA, President of CFA Society Spain, stated: “I am honored by the opportunity to assume the presidency of CFA Society Spain following the excellent work of my predecessor, José Luis de Mora Gil Gallardo. This is something I could not have imagined when I obtained the CFA accreditation many years ago. It is an exciting and unique challenge, for which I have a magnificent team, all CFA professionals, on the Board of Directors. Together, we will work to continue growing the CFA accreditation as the benchmark for excellence and prestige, and to strengthen CFA Society Spain as the authoritative voice of investment professionals in Spain.”

José Luis de Mora Gil Gallardo, CFA, said: “Under the leadership of Luis Buceta, CFA Society Spain will continue to grow, positioning the CFA accreditation as the gold standard of prestige and excellence among current and future investment professionals in Spain. Luis has demonstrated his capability and leadership at Creand (Crèdit Andorrà Financial Group) and as Vice President of CFA Society Spain. Therefore, the next four years of CFA Society Spain could not be in better hands.”

Alongside Luis Buceta, the new Board of Directors of CFA Society Spain is composed as follows:
– Sila Piñeiro, CFA, Vice President, is Director of Wealth Management PB at Deutsche Bank.
– Gemma Hurtado San Leandro, CFA, Treasurer, is Head of Investments at SGFO Capital.
– Guendalina Bolis, CFA, Board Member, is Director of Investments at Abanca Gestión de Activos.
– José María Martínez-Sanjuán, CFA, Board Member, is Global Director of Fund Selection at Santander Private Banking.
– Constantino Gómez, CFA, Board Member, is Partner at Arcano Partners.
– Jaime Albella, CFA, Board Member, is Director of Sales at AXA Investment Management.
– Pilar Garicano Madrigal, CFA, Board Member, is Executive Director at Morgan Stanley Investment Management.
– Guillermo Barandalla, CFA, Board Member, is Chief Investment and Operating Officer at Injat Family Office.
– Kike Briega Muñoz, CFA, Board Member, is Knowledge Expert in Financial Services at McKinsey & Company.

Jupiter AM Closes its Emerging Market Debt Funds Following the Departure of the Management team and Explains the Next Steps to its Clients

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Jupiter AM has issued a note to its clients regarding its emerging market debt funds following the departure of the management team, assuring that their strategies will continue to be supported by their global team, according to an official document from the asset manager accessed by Funds Society.

Regarding the impact of the emerging markets team’s departure on the rest of the fixed income segment, Jupiter states: “No impact should be expected on the investment processes or performance of the other teams. The impact is limited to the team’s input in relation to secondary discussions and opinions on some specific credits, which are also present in other strategies. Jupiter has a global credit analyst team that covers both developed and emerging markets. All our funds are backed by the global team, as they have been and will continue to be. We are very proud of our credit team’s success over the years.”

The asset manager emphasizes that the Dynamic Bond and Global High Yield funds “have never relied on the EMD team. The Dynamic Bond holds a relatively small amount of emerging market credits, which are long-term investments very well known by the existing team. Both the Dynamic Bond and Global High Yield funds continue to be supported by the global credit team, and we will ensure that all funds receive adequate credit coverage in the future.”

Regarding the continuity and status of the team, Jupiter AM notes that Reza Karim and Alejandro di Bernardo have resigned to pursue other opportunities: “Despite building strong track records, our funds failed to generate sufficient traction among clients, mainly institutional ones. After careful consideration, we decided to close the entire spectrum of EMD funds,” the note states.

What will happen next with the two SICAVs of the EMD strategies? Will the funds be closed? Jupiter AM responds affirmatively: “The strategies will close in the old-fashioned way, following market standards. Once regulatory approval is obtained, clients will be notified with at least 30 days’ notice.”

The asset manager adds that, for now, it will maintain its investment and risk/return philosophy, and the current team will continue to manage the funds until their closure.

Jupiter states that “it has created a work environment that allows investment professionals to operate with independence and invest with a high degree of autonomy. We constantly assess our retention rates and incentive structures and believe they are highly competitive. We have demonstrated that this culture and structure has attracted and retained highly qualified professionals – evidenced, for example, by the recent hiring of Alex Savvides and Adrian Gosden along with their respective teams.”