Bitcoin’s Highs Highlight Investors’ Main Concern: Crypto Asset Custody

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Cryptocurrency investors are ending the year with euphoria. Bitcoin began the week surpassing $98,000, edging closer to the pivotal $100,000 mark. According to experts, the decisive election of Donald Trump as the 47th president of the United States has reduced uncertainty, eliminating a major source of instability.

“As a result, one of the largest economies in the world, the United States, is now poised to implement liberal and crypto-friendly regulation, representing a significant step forward,” says Mireya Fernández, Country Lead for Bitpanda in Southern Europe and CEE.

Fernández highlights positive developments in recent years, including increased adoption of digital assets by retail investors, crypto market regulation in Europe, central bank interest rate cuts, and the integration of cryptocurrencies into traditional financial systems and banking portfolios. “The market is eager, and prices continue to trend upward. Bitcoin reaching $100,000 is not just a number but a genuine turning point for the crypto sector,” she adds.

Market Fundamentals

Manuel Villegas, Digital Asset Analyst at Julius Baer, notes that Bitcoin’s strong prices, currently hovering near $90,000, are backed by solid fundamentals. “Demand for spot products, positions in derivatives, and corporate intentions to add Bitcoin to treasury reserves are key factors shaping this scenario. While volatility is likely in the future, the current demand base is solid, suggesting this trend could persist. We see few significant short-term obstacles for Bitcoin,” says Villegas.

Custody Concerns

Bitcoin’s impressive performance underscores a key concern for investors, particularly institutional ones: custody. A survey by Nickel Digital Asset Management of institutional investors and wealth managers from the U.S., UK, Germany, Switzerland, Singapore, Brazil, and the UAE, managing a combined $800 billion in assets, found custody to be a bigger issue than volatility.

The survey asked participants to rank six barriers to investing in digital assets. The lack of centralized authority ranked as the second-largest barrier, followed by ESG issues and market manipulation risks. Regulatory uncertainty was ranked sixth and considered the least significant.

A notable 97% of respondents stated that backing from a major traditional financial institution is essential before considering investments in any digital asset fund or vehicle. Recent volatility has also encouraged skeptics: 19% strongly agree that price dislocations have presented solid opportunities for initial investments or increased allocations, with another 76% somewhat agreeing.

Anatoly Crachilov, CEO and Co-Founder of Nickel Digital, notes: “The industry has made significant progress in mitigating custody and counterparty risks through the adoption of off-exchange settlement solutions—an advanced form of digital asset custody—in recent years. However, this knowledge seems limited outside the native digital community. The close involvement and broad support of major traditional financial institutions are crucial for many investors, making the increased participation of BlackRock and Fidelity a very welcome development.”

New Developments

Investors are witnessing fresh advancements. According to Villegas, beyond expectations of regulatory and legislative improvements in the U.S., optimism has been fueled by Trump’s recent appointments, announcements of new agencies like the Department of Government Efficiency (DOGE), and corporate reserves. These factors, he says, have driven markets to “put their money where their mouth is,” with prices well-supported by spot demand.

On November 15, the Commodity Futures Trading Commission (CFTC) approved asset managers’ applications for options on some spot Bitcoin ETFs in the U.S., granting investors enhanced tools to hedge against directional risks or speculate further on Bitcoin’s price performance. “These derivatives should begin trading soon. Looking ahead, volatility is likely. Prices are high, and the market is relatively overextended, but with a strong demand base, this trend could continue. We see few significant short-term obstacles for Bitcoin,” concludes the Julius Baer analyst.

WisdomTree Launches a Physically-Backed XRP Cryptocurrency ETP

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WisdomTree, a global provider of financial products, has announced the launch of its latest cryptocurrency exchange-traded product (ETP). The WisdomTree Physical XRP ETP (XRPW) is listed on Deutsche Börse Xetra, the Swiss SIX Exchange, and the Euronext exchanges in Paris and Amsterdam with a management expense ratio of 0.50%, making it the lowest-cost ETP in Europe offering exposure to XRP.

The fund is designed to provide investors with a “simple, secure, and cost-efficient” way to gain exposure to the price of XRP. It is fully backed by XRP, “offering exposure to the spot price of XRP through an institutional-grade, physically backed structure.” Investors will also benefit from a dual custody model with regulated custodians and the underlying assets professionally secured in “cold storage.”

Regarding this cryptocurrency, the fund manager explains: “XRP is a native digital asset of the XRP Ledger (XRPL), a decentralized, permissionless, and open-source blockchain. XRPL uses a Proof-of-Association (PoA) consensus mechanism operated by universities, exchanges, businesses, and individuals to validate transactions. This system is more efficient than Proof-of-Work (PoW), as it requires less hardware resources and consumes less energy.

Created in 2012 specifically for payments, XRP can settle transactions on the ledger in 3-5 seconds and was designed to be a faster and more sustainable alternative to Bitcoin. XRP can be sent directly without a central intermediary, making it a convenient tool for bridging two different currencies quickly and efficiently. It is freely traded on the open market and is used in real-world applications to enable cross-border payments and microtransactions.”

Following this launch, Dovile Silenskyte, Head of Digital Asset Analysis at WisdomTree, suggests that with increasing risk appetite, exposure to altcoins like XRP could outperform a standard Bitcoin and Ether allocation. In her view, XRP can be considered alongside these megacaps in a multi-asset portfolio to reduce exposure to a single token. “Cryptocurrencies represent more than 1% of the market portfolio and should therefore be part of a comprehensive investment strategy. As an asset class with low correlation to traditional asset classes, cryptocurrencies can help increase diversification and potentially improve risk-adjusted returns in a multi-asset portfolio,” Silenskyte adds.

Meanwhile, Alexis Marinof, Head of Europe at WisdomTree, highlighted: “This new launch complements our existing range of physically backed cryptocurrency ETPs, offering investors another solution to enhance their multi-asset portfolios. Cryptocurrency ETPs are an effective way to keep investors within a regulated framework and are becoming the preferred vehicle for accessing cryptocurrencies. WisdomTree has 20 years of experience in providing and managing physically backed ETPs for institutional investors. With over $100 billion in assets under management globally across ETFs and ETPs, investors in our cryptocurrency ETPs can benefit from our global reach, scale, and resources.”

José García Joins UBS Wealth Management in Miami

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UBS Wealth Management has announced that José García has joined the firm as a financial advisor in South Florida.

He joins the UBS Miami Wealth Management market, led by Brad Rosenberg, and will be based in the downtown Miami office. García will be part of the VPHN Wealth Partners advisory team at UBS, headed by UBS private wealth managers Melissa Van Putten-Henderson and Doris Neyra. The Private Wealth team joined UBS in 2021 from Wells Fargo.

“José brings a deep understanding of clients’ complex needs and a strong commitment to helping them achieve their financial goals,” said Brad Rosenberg, Market Director of UBS Private Wealth Management for Greater Miami.

Before joining UBS, García served as a senior investment manager at Wells Fargo Private Bank, managing over $500 million in client assets. He developed investment portfolios and fostered long-lasting relationships with high-net-worth and ultra-high-net-worth clients to help them meet their wealth management objectives.

Previously, he also worked at BNY Mellon, where he “gained additional experience in customized client solutions and wealth management,” the text notes.

García holds a bachelor’s degree in Finance from the Honors College at Florida International University and an MBA from the University of Florida.

The Known, the Unknown, and the Unknowable Will Shape the Commodities Market in 2025

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The reelection of Donald Trump as president of the United States had a notable impact on commodities markets, with significant declines driven by a stronger dollar and investor repositioning. According to Marcus Garvey, Head of Commodities Strategy at Macquarie, uncertainty surrounding trade and tariff policies is affecting global growth projections. Additionally, inflation and geopolitical risk may continue to influence the prices of assets like gold and oil. “Supply and demand for commodities will remain heavily influenced by macroeconomic factors beyond specific policies,” Garvey notes.In its latest report, Macquarie suggests that the initial sell-off in commodities following Trump’s reelection was likely a knee-jerk reaction to the pronounced strength of the U.S. dollar. The Bloomberg Commodity Index (BCOM) closed the day down approximately 1%.Investor Positioning and Market Dynamics

Garvey highlights how investor positioning played a role in the market’s movements. For example, zinc, which had significant long positions, saw a nearly 5% decline, while Brent crude, heavily shorted, recovered somewhat to close with a loss of less than 1%. “Subsequent recovery aligned with a slight easing of the dollar and outperformance in the markets initially hit hardest,” he adds.While short-term commodity price fluctuations often move inversely to the strength of the dollar, Garvey stresses the importance of distinguishing between causation and correlation. “Exchange rate fluctuations alone are not definitive drivers of commodity price changes—note that the relationship between the dollar and commodity prices has been inverted for much of the past three years. The underlying macroeconomic factors are what truly matter,” he explains.Risks of Stagflation and Global Slowdown

Macquarie economists predict that the combination of higher tariffs, large and growing deficits (due to tax cuts), and reduced immigration (through deportation of undocumented immigrants) could likely slow growth and raise inflation, potentially leading to stagflation by late 2025.They also warn that a 60% tariff on all Chinese imports, combined with broader trade restrictions, could reduce China’s exports by 8 percentage points and its GDP by 2 percentage points by 2025.This global slowdown, they argue, would be bearish for overall commodity price trends, exacerbated by the bullish implications for the U.S. dollar. “While commodities are often considered an inflation hedge, this scenario—where inflation is not driven by strong demand growth or a negative commodity supply shock—would make it difficult for them to fulfill that role,” Macquarie argues.Policy Uncertainty and Commodity Sensitivity

Macquarie warns that the specifics and implementation mechanisms of tariffs remain unclear, as does the extent to which Chinese authorities may counteract their impact by boosting domestic demand. They point to corporate debt growth and monetary supply expansion as key signals to monitor for the effectiveness of monetary easing in China.In the U.S., the experts suggest that before Trump’s policies take effect, commodity prices will likely react to headlines. The high degree of uncertainty makes it exceptionally difficult for markets to price in a specific outcome. “This could amplify the impact of current favorable conditions—China’s initial monetary easing gaining traction in industrial activity, real wage growth in developed markets supporting consumption, and the strong performance of other risk assets—lifting prices in early 2025. The net effects on global growth will only become apparent afterward,” Macquarie economists add.Oil and Geopolitical Risks

Regarding oil, Macquarie sees Trump’s “drill, baby, drill” policy unlikely to significantly accelerate crude production but suggests it could marginally increase investor appetite for oil and gas.Given already high levels of activity—daily production has increased by 1 million barrels since 2019 and 2 million barrels since the 2020 pandemic lows—supply is expected to continue responding to prices rather than policies.However, geopolitical tensions under Trump’s second administration could result in supply-side surprises. “In both the Middle East and in relation to Russia’s invasion of Ukraine, scenarios exist where the currently discounted risk of supply disruptions could materialize,” the Macquarie economists warn.Gold: A Hedge Against Uncertainty

While gold’s geopolitical uncertainty boost tends to be short-lived, Macquarie identifies two key drivers that could push prices higher despite dollar strength. Chinese Investors: If Chinese investors use gold to hedge against currency devaluation risks, it could diminish the sensitivity of Western investors to the opportunity cost of holding a zero-yield asset with zero credit risk. Safe-Haven Appeal: Reduced sensitivity to these costs could solidify gold’s role as a crucial hedge in uncertain economic environments.
“Gold’s unique position as a zero-yield but zero-credit-risk asset is critical in this context,” Macquarie concludes.

 

Innovation, More Flexible Monetary Policy, and Increased Capital Investment Will Drive Economies and Markets in 2025

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“As we approach the end of the year and look towards 2025, the economic horizon presents a mix of opportunities and challenges.” With this phrase, JP Morgan Private Banking begins its outlook report. It highlights how advancements in artificial intelligence and innovation, along with more flexible global monetary policies and increased capital investment, could continue to drive economies and markets. “We believe that by adding diversification and generating income, clients can strengthen their portfolios to respond to an evolving economic environment. Our ultimate goal is to build resilient portfolios that not only align with our core market outlook but can also withstand various risk scenarios,” says Adam Tejpau, Chief Executive Officer, International Private Bank, JP Morgan.

The entity’s balance is clear: 2024 has been a year in which markets have performed exceptionally. According to their view, the year was characterized by a decrease in inflation, relaxation of monetary policy, and strong growth in GDP and corporate profits. Looking ahead to 2025, investors are ready to capitalize on this market strength.

In this regard, they believe that with new investment options, such as evergreen alternative funds, the acceleration of capital investment, and transformative topics like artificial intelligence, investors are poised to capitalize on emerging trends that could continue to drive the economy and markets. “Our ultimate goal is to build resilient portfolios through income generation and diversification, which can help mitigate the impact of unexpected disruptions,” says Grace Peters, Global Head of Investment Strategy at JP Morgan Private Banking.

To leverage the strong foundation created by market gains in 2024, their outlook report identifies five key themes. The first is the consideration that the global monetary policy relaxation should boost economic growth. According to their view, it is expected that the monetary policy easing cycle will continue next year, with declining interest rates supporting economic growth in the U.S. and the Eurozone, without significantly boosting demand or reigniting inflation.

“In the U.S., the bond market’s valuation implies a relaxation cycle ending in the first quarter of 2026, with the official interest rate near 3.5%. This provides a favorable environment for risk assets, benefiting sectors like housing, commercial real estate, and productivity, while also fostering an emerging revival of trading,” says Jacob Manoukian, Head of Investment Strategy for the U.S. at JP Morgan.

The second key theme identified is that capital investment is a megatrend driving the future. The entity believes that with high margins, growing profits, increased confidence from executives, and policymakers focused on supporting growth, companies and governments are ready to spend. Capital investment will be a major driver for three global trends: artificial intelligence, energy infrastructure, and security.

“We anticipate an increase in capital investment in the energy sector, driven by the reindustrialization of U.S. manufacturing capacity, the rise of electrification with clean energy solutions, and the growing demand for energy from data centers. This strong investment scenario is not limited to the U.S. Japan is at the forefront of many of these structural trends, and we see that, as a result, capital investment is increasing,” says Alex Wolf, Head of Investment Strategy for Asia at JP Morgan.

Third, the entity sees that European global giants offer resilience and profitability opportunities. According to Erik Wytenus, Head of Investment Strategy for JP Morgan Private Banking for Europe, the Middle East, and Africa, despite the productivity challenges Europe faces, investors should not overlook large European companies in 2025. “It’s important to remember that the 50 largest European companies earn approximately only 40% of their revenues from Europe, making these ‘national champions’ in this group true global players. While the ‘American exceptionalism’ has solid fundamentals, we also advocate for complementing U.S. positions with international diversification, including in Europe, which is benefiting from the monetary policy easing driven by the ECB,” argues Wytenus. For this expert, investors can continue to improve the resilience of their portfolios by considering real assets and income streams to better withstand unexpected disruptions.

Fourth, they emphasize that it will be crucial to take advantage of the frontiers of innovative investment in alternatives. “In the investment world, innovation sometimes comes in waves; we believe 2025 will see a surge in innovation as the sector explores new areas like evergreen alternative funds, sports, space, and urban development. Open-ended, indefinite-duration alternative funds (evergreen) are gaining popularity. In 2024, half of our commitments to alternatives will be in such structures, three times more than in 2023. These new strategies and investment opportunities, though not the core of portfolios, offer growth potential and diversification in a rapidly changing world,” adds Kennedy.

Finally, the entity considers it essential to focus on political impact over electoral outcomes. Following this year’s electoral results, which highlighted the power of anti-establishment movements, many investors are thinking about sovereign debt and deficits. However, investors’ attention should now shift from electoral outcomes to the impact of policies on the economic and investment landscape. “Latin America was at the forefront of the global monetary policy easing cycle, which has helped sustain growth and economic activity throughout the region. However, ‘fiscal activism’ from governments may unanchor inflation expectations and disrupt monetary efforts, posing a risk to the expansionary cycle,” comments Nur Cristiani, Head of Investment Strategy for JP Morgan in Latin America.

In Cristiani’s opinion, in the context of global changes in government power, investors must watch the risks posed by anti-establishment politicians. “Beyond right and left, the rise of anti-establishment parties could increase political and economic volatility, which strengthens the need for resilient investment portfolios,” he concludes.

Global Financial Companies Want to Invest in Latam, but the Market Structure Doesn’t Support It

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The 84% of the global financial companies surveyed for a Nasdaq report plan to increase their investment exposure to Latin America over the next 12 to 24 months. Despite this strong intention, 59% of respondents cite market structure issues as a significant barrier.

Fragmentation, processing errors, and the lack of standardization are key obstacles that must be addressed to unlock these investment flows, according to the Nasdaq report conducted in collaboration with The Value Exchange.

The information comes from interviews with about 100 companies: 52% wealth management investors, 18% institutional investors, 16% brokers, and 14% custodian banks.

70% of the respondents identified the high cost of regional variation in processes and platforms as a significant blocker. This variation creates high operational costs and risks, particularly for institutional investors who need to maintain different operational models for each market.

61% of respondents experience high levels of failed loans/recalls, and 67% face settlement failures due to low straight-through processing (STP) rates. The lack of STP automation is a critical issue, particularly for wealth investors, who report STP rates below 55% in all Latin American markets.

Managing the complexity of Latin American markets requires significant resources, equivalent to about three times the full-time staff for wealth investors and even more for institutional investors. This complexity results in high fixed costs and limits economies of scale, making it difficult for smaller companies to operate efficiently.

Respondents expect significant savings with the harmonization of processes and messaging standards across all markets, with potential improvements in profits and losses of up to 21% in areas such as collateral movements and corporate actions. There is a clear demand for standardization and regionalization to reduce costs and improve efficiency.

Renewable Energies in Private Markets: Climate and Financial Gains

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To examine the perception of a trade-off between climate impact and returns in renewable energy investments, MSCI has analyzed the returns of private investments in the renewable electricity subindustry (renewables) compared to those in the drilling, exploration, production, and integration of oil and gas subindustries (oil and gas).

Although the two subindustry groups may differ in their operations, business models, and supply chains, a comparative analysis can provide insight into the investment appetite and relative robustness of the exit markets in both spaces.

In recent years, private fund exits from renewable energy investments have generated higher aggregated investment multiples (gross of fees) compared to exits in oil and gas. Looking at investment multiples, which compare total investments and total revenue at the ownership level, renewable exits surpassed those of oil and gas in each year from 2016 to 2023, up until the fourth quarter of 2023.

To incorporate the role of cash flow timing in returns, we analyzed the internal rate of return (IRR) (gross of fees) for both subindustry groups. Our findings suggest that the median IRRs for exits in renewables and oil and gas were largely aligned with the investment multiple results, further reinforcing the outstanding performance, up until the fourth quarter of 2023.

Therefore, the perception of a potential trade-off between climate impact and performance may not reflect the financial returns of renewable investment exits since 2016, making these assets more relevant to a broader range of energy investors, regardless of their climate focus. In MSCI‘s blog analysis from the third quarter of 2023, the relatively strong exit market for renewables in recent years was associated with an increase in net capital flows, providing the industry with the necessary capital to achieve the net-zero emissions goal.

Structured Capital I: The Controversial Fund that Complicates LarrainVial in Chile

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This month marks one year since Chile witnessed the simultaneous eruption of a financial scandal involving false invoices, the brokerage firm STF Capital, and the factoring company Factop, along with a major corruption case known as the “Audio Case,” centered around the network surrounding lawyer Luis Hermosilla. The repercussions of these events remain significant in Santiago’s financial arena.

One of the reverberations involves LarrainVial Activos AGF—a management firm specializing in alternative assets and part of the LarrainVial financial group—which became embroiled in controversy due to a fund it launched in late 2022, named Capital Estructurado I. This fund led to charges by the local regulator and a lawsuit for alleged disloyal management.

Currently, the firm is undergoing a sanctioning process led by the Investigation Unit of Chile’s Financial Market Commission (CMF). The CMF has brought charges against LarrainVial Activos AGF, its directors—Andrea Larraín, Sebastián Cereceda, José Correa, Jaime Olivera, and Andrés Bulnes—and its managing partner, Claudio Yañez.

Charges were also brought against STF Capital Corredores de Bolsa—already fined last year by the CMF—and its CEO, Luis Flores, as well as Álvaro Jalaff Sanz, Antonio Jalaff Sanz, and Cristián Menichetti Pilasi.

While the details of the charges remain confidential, the CMF questioned aspects of how the investment vehicle was managed and structured. The charges focus on the structuring, marketing, and valuation of Capital Estructurado I.

Background of the Fund

Capital Estructurado I was created to pay Antonio Jalaff’s debts and convert them into an indirect stake in the renowned real estate holding Grupo Patio. Launched in late 2022 and operational from January 2023, the fund aimed to finance Jalaff’s debts through Inversiones San Antonio, totaling approximately 25 billion pesos (about $26 million). In exchange, the fund would acquire a 3.87% indirect stake in Grupo Patio SpA.

Issues with Fund Structuring

The fund offered two series of shares: Series A, for creditors of San Antonio, allowing them to exchange their debts for the possibility of becoming indirect shareholders of Patio, and Series B, for non-creditor investors brought in by STF Capital on behalf of clients. This structuring led to complaints against the manager and broker, accusing them of acting to the detriment of end clients.

The fund’s purpose, as outlined by the manager, was to “invest directly or indirectly in instruments representing (i) equity of Inversiones Santa Teresita SpA and the Fondo de Inversión Privado 180 or (ii) debt or equity of entities or funds with direct or indirect participation in the vehicles.”

Legal and Financial Repercussions

In addition to regulatory scrutiny, the situation prompted a lawsuit from 23 investors accusing LarrainVial Activos AGF of disloyal management, alleging the firm knew of Jalaff’s precarious financial situation when marketing the fund. The process is ongoing.

The case also attracted attention from the Risk Rating Commission (CCR), which mentioned the CMF’s proceedings against LarrainVial Activos in its October report. The CCR maintained approval for AFPs (pension funds) to invest in three other LarrainVial funds while the situation remains under review.

The value of fund units has sharply declined, plummeting from 27,577.5 pesos ($28.3) in November 2023 to 4,538.8 pesos ($4.7) by September 2024—a drop of 83% in one year.

Statements from LarrainVial Activos AGF

The firm expressed “confidence in the process,” emphasizing its adherence to high standards in fund creation and management. It reiterated its commitment to acting transparently and in compliance with regulations, highlighting that all investors were thoroughly informed about the fund’s characteristics, risks, and terms. The firm continues to evaluate actions to safeguard the vehicle’s assets and its investors’ interests.

Challenges Facing STF Capital

STF Capital Corredores de Bolsa faces a more precarious situation. In March 2023, the CMF suspended its operations due to financial reporting and capital requirement violations. By August, the regulator imposed a fine of 13,500 UF (approximately $382,610) and canceled its registrations, critical for operating in Chile’s financial market.

Regarding Capital Estructurado I, STF Capital is accused of prioritizing its claims and benefiting at the expense of other parties. The firm insists it is preparing evidence to refute the charges. However, financial difficulties have led its CEO, Luis Flores, to proceed without legal representation.

In October 2024, the Court of Appeals upheld fines against the brokerage and its executives. The CMF fined Flores 10,800 UF ($306,090) and imposed penalties of 9,000 UF ($255,070) each on Ariel and Daniel Sauer, owners of the controversial factoring company Factop.

The Factop Connection

Factop is implicated in a network of corruption and fraud involving thousands of false invoices. STF Capital maintains that its minority shareholders, Flores and Sebastián Somerville, have acted independently of Factop’s controlling shareholders, Ariel and Daniel Sauer, since March 2023. The firm is pursuing appeals, including at the Supreme Court, to separate itself from allegations tied to its controlling partners.

Flores, seeking leniency through a whistleblower program, claims the penalties imposed on STF Capital and himself far exceed those levied on the Sauer brothers, calling this disparity unjust.

Ongoing Investigations

The complex situation intertwines with other cases, including Factop’s alleged corruption and fraud network and the Jalaff brothers’ suspected involvement in false invoice schemes. The matter continues to unfold across multiple legal and regulatory fronts.

How Do They See the Economy, and What Concerns the CFOs of Large Companies?

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Corporate CFOs and treasurers are facing greater complexity compared to just three years ago, amid shifting economic and trade corridors, ongoing macroeconomic headwinds, and geopolitical risks.

While managing an international business is rarely straightforward, many companies remain optimistic about their growth prospects as new technologies enable them to uncover and map opportunities amidst uncertainty, according to the key findings of HSBC’s latest survey, the “Global Corporate Risk Management Survey.” The survey involved 300 CFOs and over 500 senior treasury professionals from multinational companies across various sectors in the Americas, Asia, and EMEA.

Reflecting on the survey results, Rahul Badhwar, Global Head of Corporate Sales for Markets & Securities Services, highlights that companies continue to face multiple challenges that could impact their finances. “Navigating interest rates, inflation, and volatile currency markets while implementing risk management strategies has become increasingly essential to corporate treasury functions. In a world of uncertainty, companies aim to mitigate risk while also benefiting from it,” he notes.

In this context, 68% of respondents agree that treasury plays a key role in strategic decision-making, up from 41% in 2021 when HSBC last conducted its corporate risk management survey. Additionally, 47% state that risk management is an area where their company feels less prepared. Respondents also acknowledge that the impact of inflation and economic policies has made revenue and cost projections inaccurate in some cases, with supply chain and sales logistics disruptions delaying cash flow timing. According to 93%, inaccuracies in cash flow forecast data have caused avoidable losses over the past two years, whether due to over-leveraging or liquidity deficits.

“There are times when the main driver of currency markets isn’t macroeconomics. This year, with a record number of countries heading to the polls, elections and geopolitics have sometimes been the dominant factors behind currency valuations. Unlike economic variables, geopolitical outcomes are even harder to predict, complicating corporate treasurers’ efforts to hedge foreign exchange risks and make long-term decisions,” Badhwar adds.

Key Risks

Notably, many companies are optimistic about growth prospects in the near future, according to the survey. Key drivers include rising customer demand and faster adoption of new technologies (both at 75%), as well as easing geopolitical tensions (52%). However, some challenges are likely to persist: 58% are concerned about inflation, and 55% fear a prolonged economic recession.

Holger Zeuner, Head of Thought Leadership, EMEA, Corporate Sales, observes that many treasury teams were caught off guard by the sharp rise in interest rates in 2022 and 2023 as central banks sought to curb runaway inflation, leading to higher financing costs. “Companies are looking to find a structural balance between fixed-rate and variable-rate debt to manage interest rate risks in alignment with their business profiles and market conditions. Such an approach could potentially help them better safeguard against worst-case scenarios while also allowing them to benefit when rates decline,” Zeuner explains.

HSBC’s survey also reveals that ESG risks in supply chains are becoming increasingly important for treasurers. A growing number of respondents expect to work with banks or other financial partners to support suppliers’ ESG efforts, but 27% also anticipate terminating contracts with suppliers over ESG issues in the next three years. “Building a reliable supplier relationship takes years, so ensuring you don’t have excessive concentration risk while maintaining a resilient supply chain can conflict with switching suppliers due to ESG scores. That’s the dilemma companies are evaluating, but the willingness of some firms to take steps toward greater accountability in supply chain practices is potentially encouraging from an ESG perspective,” notes Vivek Ramachandran, Head of Global Trade Solutions.

According to the survey, 99% of respondents are at least somewhat concerned about ESG visibility among their suppliers, while 56% are highly concerned about their ability to meet ESG reporting requirements—a sentiment more prevalent in Europe, where ESG regulation is more advanced than in other regions. However, HSBC’s survey indicates that only a third of companies globally have incorporated ESG guidelines and policies into their supply chains so far.

From HSBC’s perspective, AI is expected to provide significant advantages to companies and their treasury functions. 61% believe AI will positively impact their company’s profitability in the next three years, while another 61% see it as highly beneficial for risk management decision-making during the same period. However, 62% are concerned about a lack of access to talent and skills that could slow AI adoption, while only 5% view financing as the main challenge.

Jupiter AM Hires the European Equities Team from GAM Investments

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Jupiter AM hires GAM European equities team

Jupiter Asset Management (Jupiter) has announced the appointment of Niall Gallagher, Chris Sellers, and Chris Legg, who until now comprised the European equities team at GAM Investments. According to the asset manager, this hire is part of a restructuring of its investment expertise in this key area for the firm.

The three managers have worked together for several years, leading and managing GAM’s successful and established European equities franchise. The team is expected to join Jupiter by the summer of 2025. Currently, the European Equities Team manages approximately £1.4 billion in European equities strategies, serving both institutional and retail clients.

“As one of the leading European equities teams in the industry, they have a strong investment track record, delivering top-quartile returns across nearly all time periods. Notably, they have also been successful in attracting assets, achieving net positive flows in their strategies over the past five years, despite the European equities sector recording cumulative net outflows of over £100 billion during the same period,” Jupiter highlighted.

This announcement aligns with Jupiter’s strategy of attracting top-tier investment talent to deliver superior results for clients and an exemplary experience. “In the absence of any further commitment to GAM regarding the potential transfer of funds currently managed by the European Equities Team, our expectation is that, following an orderly transition, the team will take over the management of Jupiter’s existing range of European equity funds by the summer of 2025. Any transition of investment management responsibilities will be seamless and conducted in the best interests of clients,” stated the asset manager.

Following the announcement, Kiran Nandra, Head of Equities at Jupiter Asset Management, remarked: “As we realign our investment expertise within the core area of European equities, we are excited about the addition of Niall, Chris, and Chris to Jupiter. We believe their strong investment track record and institutional approach will enhance outcomes for a broader range of clients.”

For his part, Niall Gallagher, Lead Investment Manager, added: “We are thrilled to join Jupiter, where the focus on active investment management, combined with a client-centric philosophy, is fully aligned with our vision. We look forward to working with our new colleagues to expand our client base over time.”