Family Office & RIA Weekly Roundup | 7.11.24 | Volume 111
Volume 111
07/11/2024 (5 Min. Read)
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Latin Tech Boom, AI PCs, and Brazilian Soybeans in this Week's Edition...?
Take a Lap Around the Industry
From Beef to Bytes: Uruguay's Rapid Transformation into a Tech Powerhouse
Uruguay, traditionally known for its beef and agricultural exports, is quickly becoming a significant player in the technology sector. The Universidad de la República, the country’s largest university, enrolls about 1,000 technology students annually, yet only 10% graduate, with many students leaving early to join the lucrative tech workforce. This trend highlights a critical issue: while the tech industry in Uruguay is growing rapidly, exemplified by the presence of big names like MercadoLibre Inc. and Nu Holdings Ltd., it faces a shortage of qualified engineers and workers. The country has become a favored home for billionaire founders like Marcos Galperin and David Velez, attracted by Uruguay’s favorable tax policies, pro-business regulations, and stable living conditions. Private equity and venture capital investments have poured in, with over $526 million invested in Uruguayan startups between 2020 and 2023. However, the small population and high cost of living pose challenges in sustaining this growth. As tech firms continue to expand, the need for a strategic approach to education and talent retention becomes increasingly vital for Uruguay to maintain its momentum in the digital economy.
"It’s a nice and efficient hub, a great country, a stable market."
Hernan Kazah (Kaszek Ventures)
Private Funding Pulse Check?
Rep Activity Tracker ??
领英推荐
AI PCs: The Future of Computing or Just a Fad
Tech giants such as Microsoft Corp. and Qualcomm Inc. are launching a marketing blitz for a new generation of computers dubbed "AI PCs," touting advanced artificial intelligence features embedded in laptops and desktops. These AI PCs stand out from standard devices with an additional processor designed to enhance AI capabilities, including personal assistants and task automation. However, industry research firm IDC reports that only 3% of PCs shipped this year will meet the processing power criteria to be considered AI PCs. Convincing consumers and businesses to invest in these high-tech machines will require a broader range of products and robust software to leverage the new hardware. Despite enthusiasm from developers and tech-savvy early adopters, analysts remain skeptical about the immediate utility of AI features. Compatibility issues with existing software and the higher cost of AI PCs present significant hurdles. Nonetheless, companies like Qualcomm and PC makers such as Dell and HP are optimistic that AI capabilities will drive future upgrades and fuel excitement in the personal computer market.
"Do you want to buy a PC that is not capable of doing those AI things that you’ll want to do in the future? I don’t think so"
Michael Dell
Brazil's Soybean Exports Soar as Currency Tumbles?
A significant decline in Brazil's currency over the past month has insulated the country's farmers from a global plunge in soybean prices, providing a competitive advantage over US producers. The Brazilian real (R$) has depreciated by 11% against the dollar this year, driven by concerns over the nation’s budget deficit. This depreciation has increased revenue for Brazilian farmers, who sold over 4 million metric tons of soybeans in early July, the highest since October 2020. As the world’s largest soybean exporter, Brazil's currency fluctuations significantly impact global agricultural markets. The weaker real allows Brazilian farmers to better withstand lower dollar-denominated commodity prices, boosting exports and putting pressure on futures prices in major trading hubs like Chicago. However, the benefit of a weaker currency is partially offset by higher costs for imported agricultural inputs. As Brazil's government attempts to stabilize the real, the currency is expected to strengthen slightly by the end of 2024.
"It was a great opportunity, which we had not expected, especially with futures in decline"
Eduardo Zorzi (Grupo Bavaresco)
The Hidden Risks of Private Equity: A Bubble Without Prices
?The debate over whether a bubble can exist in an asset class without transparent prices is intensifying, particularly in the context of private equity. Despite the lack of real-time pricing, concerns are mounting that private equity may be headed for a significant reckoning. Over the past decades, institutional investors have flooded private markets, drawn by promises of high returns in a low-rate environment. The value of North American private equity assets under management has surged to $3.5 trillion. With interest rates now higher, the viability of many investments is under scrutiny, especially in sectors like commercial real estate. Pension funds are already reporting disappointing returns, some are even stuck in "zombie funds." The opacity of private markets complicates valuation and accountability, potentially leading to prolonged inefficiencies and misallocated capital. This gradual deflation could have long-lasting economic repercussions, affecting pensioners and taxpayers.