Family Office & RIA Weekly Roundup | 11.14.24 | Volume 129

11/14/2024 (5 Min. Read)

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Malaysia Grows its Prominence, Tariffs Become a Costly Gamble, and ETFs Hit New Highs in this Week's Edition...

Take a Lap Around the Industry

• BlackRock Targets Money-Market Fund Business in New ETF Push (Bloomberg)
• Bitcoin Reaches Record High Near $85,000 as Crypto, Trump Trades Dominate Stock Market (Yahoo Finance)
• Mexico to Court Private Investment in Power Sector to Support Green Energy (WSJ)
• JPMorgan Launches European Version of JEPI, the Largest Active ETF (Financial Times)

Malaysia Emerges as Key Investment Hub Amid Global Supply Chain Shifts

Malaysia's growing prominence among Western financial institutions is fueled by a blend of geopolitical shifts, robust manufacturing capabilities, and a strong green policy agenda. As global trade tensions drive companies to diversify supply chains, Malaysia has emerged as a key beneficiary. With decades of investment in high-tech manufacturing, the nation’s infrastructure supports major players like Intel, Micron, and Infineon. Additionally, a recent Standard Chartered survey of 400 financial institutions found that 25% plan to invest in Malaysia over the next year, recognizing the country's stability, advanced supply chain, and commitment to net-zero emissions by 2050. Malaysia’s government is actively supporting these trends, with initiatives like the New Industrial Master Plan 2030 and the National Energy Transition Roadmap, aimed at boosting manufacturing GDP and fostering sustainable growth. With these advantages, Malaysia stands out as an increasingly attractive option for investors focused on long-term gains in manufacturing, infrastructure, and renewable energy.

“Geopolitical risk has prompted many companies to re-evaluate which markets they invest in, and that is playing out in places such as Malaysia. The country’s vibrant multiculturalism is a strong advantage on the world stage."

Saif Malik (Standard Chartered)

Private Funding Pulse Check

• ZYMOFIX, a biotech company specializing in the efficient production of beneficial microorganisms for agricultural and technical applications has raised €2M in funding with participation from The Nest Family Office
• Saudi-based FinTech platform, Lean Technologies, which empowers MENA's financial products with data and payment tools, has secured $67.5M in a Series B round with backing from Duquesne Family Office, LLC?
• With support from MSM Investment Advisors, LAKE (LAK3), a company dedicated to unlocking access to clean and sustainable water through decentralization has secured $12.4M in funding
• Smedvig Capital Family Office has participated in a $8M? Series A funding round for Glint Solar,? a Norwegian startup focused on accelerating solar energy adoptions

Source: FINTRX Data?

RIA Activity Tracker ??

• Mercer Advisors has expanded its wealth management portfolio by acquiring Waypoint Capital Advisors, founded by Jon Kennedy, and Chapel & Collins, led by senior wealth advisor Dennis Collins, adding nearly $1.7 billion in combined client assets
• Waypoint, with approximately $1 billion in assets, focuses on ultra-high-net-worth clients with over $10 million in assets, boosting Mercer’s family office segment to around $15 billion in AUM
• Chapel & Collins, managing $675 million, serves a core segment of high-net-worth clients, including corporate retirement plans, complementing Mercer’s broader service offerings
• These acquisitions mark Mercer’s seventh and eighth deals in 2024, with the firm planning further expansions under new M&A leadership as it continues pursuing growth opportunities in? favorable markets

(Citywire)

Trump’s New Tariff Strategy: A Costly Gamble for Global Trade

President Trump’s latest tariff agenda marks a return to aggressive protectionism, with 60% tariffs on Chinese imports and 10%-20% duties on goods from other countries. Dubbed “Tariff Man,” Trump envisions using tariffs not only as revenue-generating tools but as leverage to renegotiate trade relationships worldwide. This approach could prompt ripple effects across sectors. U.S. tech and manufacturing firms relying on Chinese components may face higher costs, while agriculture could benefit if trade deals encourage other countries to buy more American goods. Yet, the complexity of implementing such sweeping policies introduces uncertainty, especially as businesses brace for potential supply chain shifts, inflationary pressure, and diplomatic pushback. While Trump’s tariffs aim to shield U.S. industries, questions linger on whether they will stoke inflation and slow growth—a gamble reminiscent of his first term's economic policies.

Source: Bloomberg

Citi’s Big Bet: Can New Leadership Reignite Its Private Equity Play

Citigroup’s push to reclaim a competitive edge in investment banking is underway with a focused bid to boost its presence in private equity deals. CEO Jane Fraser’s hiring of Ravi Raghavan, formerly with JPMorgan, underscores Citi’s intent to rebuild its client relationships and reposition itself as a top player in this lucrative field. Raghavan has set a goal to increase Citi’s investment banking fee market share to over 5% by 2025, aiming for a 0.5% annual increase from its current 4.6%. This growth target comes as U.S. interest rates stabilize, and private equity firms anticipate renewed M&A activity, buoyed by policy support and economic optimism. Citi’s private credit partnership with Apollo and a refreshed lending strategy are among its key steps to demonstrate commitment. Yet Citi faces fierce competition from established rivals like JPMorgan, Goldman Sachs, and emerging contenders like UBS, all vying for a greater share of private equity financing fees.

“It’s certainly better for us and the rest of the industry when the three biggest U.S. banks are more aggressive in leveraged finance."

Global ETF Flows Hit New Highs as Investors Turn to Fixed Income, U.S. Equities?

Global investors have been piling into exchange-traded funds (ETFs) in record numbers, driven by both shifting market conditions and the recent election of Donald Trump as the next U.S. President. As of October 31, global ETF inflows reached $1.4 trillion, already surpassing 2021’s year-end record of $1.33 trillion, according to BlackRock. A post-election buying surge saw $22.2 billion flow into U.S.-listed ETFs in a single day, shattering previous records. BlackRock’s head of EMEA investment strategy, Karim Chedid, attributes the rise to heightened interest in locking in favorable yields and bolstering portfolio diversification, especially in high-yield European bonds and commodity ETFs. Meanwhile, strong U.S. equity returns and renewed optimism in China-focused funds have further accelerated flows, with emerging markets, led by China, seeing notable inflows following stimulus measures. However, experts caution that while ETF adoption remains structurally strong, the current year’s figures may not be easily repeatable.

“The jump higher was driven by exuberance and a great deal of short covering, as short interest on China ETFs at the end of the summer was significantly elevated."

Matthew Bartoli (State Street)