UBS, a Swiss financial institution that is among the largest in the world, brought together clients and investors on November 11th, in São Paulo, at the Investment Managers Forum 2024 (IMF).
The event, held by the Global Wealth Management division, brought together investors to discuss possible scenarios and challenges for investment markets not only in Brazil, but also around the world. The IMF was attended by big Brazilian names, such as the former Minister of Finance and former president of the Central Bank, Henrique Meirelles, and the governor of the State of São Paulo, Tarcísio de Freitas.
“We just had the US election; the world is experiencing a scenario of higher interest rates and seeing a stronger dollar. In Brazil, we have this whole tax discussion and the issue of interest. So, this year’s IMF aims to bring managers who can share their views on the economic and political scenario, bring their world views, a look at trends, see what economic cycle we are in and better prepare our clients for a portfolio composition scenario where the main focus is resilience”, said Marcello Chilov, Head of Global Wealth Management for Latin America at UBS.
The executive also highlighted that the company always seeks to deliver the difference. “This is the intention of UBS [com o IMF]be together with our clients and bring investment opportunities that escape the setup of the more traditional scenario”, added Chilov.
The panels discussed important topics for the investor ecosystem, such as “Transition to a green economy: infrastructure opportunities in Brazil”; “Equities Markets: navigating Brazil’s volatility”, “Private Real State & Credit” and “Macro Investment: building today’s portfolio”, and featured the participation of relevant names, such as Leonardo Yamamoto, Executive Director of Mubadala Capital; Gustavo Montezano, CEO of YvY Capital; Ralph Rosenberg, Founding Partner and CIO of Perfin; Leonardo Linhares, Member of the Board of Directors and Head of Equities at SPX Capital; Christian Faricelli, Partner and Equity Manager at Absolute Pace; Andre Suguita, Managing Partner at Jugis Capital; Thiago Costa, Partner at Central Capital; Felipe Guerra, Manager and CIO at Legacy Capital; and Bruno Coutinho, CEO and Manager at MAR Asset Management.
The economic context and political
Throughout the panels, participants highlighted the challenging scenario currently faced. In the domestic environment, expectations continue for the spending cut package, uncertainties in the fiscal environment, higher interest rates and a stronger dollar, aspects that directly influence the attraction of investment.
In the external environment, the panorama is still quite complex. After the recent election of Donald Trump as president of the United States, investors are eagerly awaiting the market’s reaction to his return to the White House and what his proposals will be.
Participating in one of the first panels, Henrique Meirelles said that public debt, which according to the IMF (International Monetary Fund) is around 80%, is today the biggest threat to investments. According to the former president of the Central Bank, this scenario shows the urgency in presenting the spending cut package, as its postponement could undermine investor confidence.
The economists present at the Forum also discussed the possible consequences of the American election and warned about the risks to inflation and the American deficit.
Pedro Jobim, chief economist and founding partner of Legacy, highlighted that the new Trump administration intends to continue with a policy of increasing tariffs. “This should imply slightly higher inflation in the United States and a slowdown in China and also in Europe, while Germany, which is the largest economy in the region, is in recession. This scenario signals a possible slowdown, but it is difficult to know whether this will evolve into a global recession”, warned Jobim.
Diversified portfolio
In a scenario of global economic uncertainty, having a balanced portfolio is the main factor in protecting investors’ portfolios, according to Andre Bannwart, Head of UBS Evolution. “At UBS we have several product lines for clients. We have credit funds, incentivized credit funds, Brazil stock market funds, offshore stock market funds and macro funds, each with an investment and risk profile. A complete range of products to offer the best to our customers.”
Also participating in the Forum, Guilherme Zaczac, Head of Liquid Alternatives & Institutional Mandates for Brazil at UBS GWM, highlighted the importance of bringing multidisciplinary solutions. “We live in an environment that is always challenging and in transition. In this sense, we seek to bring solutions in liquid assets, illiquid assets, in fixed income, in shares, in multimarket funds. This is a process that doesn’t stop; We must always be thinking about the customer’s interests and needs to offer the best in the industry.”
Victor Schmutzler, Head of Private Markets for Brazil at UBS GWM, adds that illiquid investment products deviate a little from the more traditional classes. For him, the possibility of allocating to these types of strategies allows investments to have higher returns, precisely because the investment horizon is longer.
“There is an intrinsic benefit of having less correlation between these macroeconomic variations. Building a well-balanced portfolio, bringing not only these traditional classes, but also including Private Equity, Venture Capital products, private debt products, infrastructure projects, special situations, makes the return more consistent and adjusted, with less volatility”, he concluded.
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