Finance

I am a wonderful person to pitch. You walk in with your idea, and ten minutes later I'm at the whiteboard sketching out a path to daylight, just as excited as you are. It's genuine. And it tells you absolutely nothing about what I'll be like two years from now, when you've missed plan three quarters in a row and need to come back to me for more money. That's the trouble with how founders pick investors. You're judging them during courtship — the one moment they're guaranteed to be on their best behavior. Everybody's founder-friendly when they want in.  What you actually need to know is how they behave after the money is in the bank. Especially when things go wrong. And things go wrong. In 2000, at the bottom of the dot-com crash, Reed and I flew to Dallas to try to sell Netflix to Blockbuster for $50 million. They laughed us out of the room.  When we got home we laid off a third of the company. Nobody was courting anybody anymore. So do more reference checking than you think is necessary — and don't waste it on the winners. Of course the founders who sold for nine figures love their investors. Everybody's a great partner when the chart goes up and to the right. Go find the companies that pivoted, missed their numbers, or quietly shut down. They aren't on the portfolio page so you'll have to dig. Then ask those founders what happened when they disagreed. What happened when they needed more money. And what happened when the company stopped growing quickly and stopped being exciting. Money is the same no matter who you get it from. But a good partner is priceless.

This time Is different We don't often say that about the Fed, but after yesterday's FOMC meeting, we think it may actually be true. In fact, we believe yesterday's meeting ushered in a new era of monetary policy in the United States.    For the better part of two decades, monetary policy has followed a familiar playbook: extensive forward guidance, frequent communication, data dependence and the  Federal Funds rate as the primary policy tool. While leadership has changed, the broader framework has remained remarkably consistent.   What we heard yesterday suggests the possibility of a meaningful evolution.   We believe the Fed may be moving toward a framework that places less emphasis on signaling every move in advance and more emphasis on assessing where inflation, employment and broader economic conditions are heading. In a world of real-time data and increasingly sophisticated analytics, that could prove to be a healthier and more effective approach.   We also continue to hear indications that the policy toolkit could broaden beyond the overnight policy rate, with greater consideration of balance sheet policy, liquidity conditions, money supply dynamics and longer-term interest rates.   Importantly, change does not automatically mean more volatility. A broader set of tools and a more forward-looking approach could ultimately increase confidence in policy outcomes rather than diminish it.   For investors, the near-term message remains straightforward: inflation is still above target and remains the Fed's primary focus. While rate hikes are far from certain, they remain a possibility that markets need to respect.   That's one reason we continue to favor income-oriented fixed income opportunities over pure interest-rate expressions. And when markets overreact to uncertainty around policy change, we think there may be opportunities to sell volatility rather than buy it.   This time may indeed be different, and it will be fascinating to watch how this evolution in monetary policy unfolds. The real question is whether less signaling creates more uncertainty, or ultimately more confidence in the Fed's ability to achieve its objectives.

If you want to catch a glimpse of where the energy system is heading, take a look at where the capital is flowing. The International Energy Agency (IEA)'s latest report makes the direction unmistakable: towards renewables, grids, and electrification. Electricity-related spending already makes up nearly 60% of all global energy investment, with renewables remaining the largest single category. The recent acceleration in grid investments is undeniably good news. Yet, fixing the grids remains a crucial mission before they become even more of a bottleneck. Overall, the speed of this transition is still striking, as well as the fact that it has held steady throughout changes in the geopolitical landscape. This unwavering momentum reveals a strong commitment to confronting a defining challenge of this decade: Now more urgent than ever, the goal is to build resilient energy systems that minimise structural dependencies and are designed for rising electricity demand.

NextEra is in talks to buy Dominion. The world's biggest clean energy operator acquiring what may be the worst-run utility in America. Everyone will call this an AI story. It isn't. It's a competence story.⁣ ⁣ Dominion has been a fixer-upper for years. Virginia's legislature got so fed up waiting for Bob Blue to modernize the grid that it stepped in and mandated it — grid utilization, batteries, VPPs. Dominion's own $11.5B offshore wind project still isn't fully complete. That's the asset NextEra is circling.⁣ ⁣ NextEra isn't without scars. Its yieldco collapsed ~60% in 2023 under interest rate pressure, dragged NEE down 25%, and it quietly rebranded to distance itself. It's also failed in previous acquisition bids. But what NextEra has that Dominion doesn't: 3,800+ MW of operating battery storage today, $5.5B more committed through 2029, and a 32–43 GW pipeline through 2032.⁣ ⁣ Data centers need power in 18 months, not 10 years. New gas plants can fill 100–300 hour gaps but can't move at that speed. Batteries and VPPs can. NextEra knows this. Now it's buying the keys to America's data center capital.⁣ ⁣ Here's the irony: Trump killed offshore wind permits, issued a stop-work order on Dominion's $11.5B wind farm, and has pushed coal and gas at every turn. He's also the most merger-friendly president in decades. NextEra just figured out how to use both against him.⁣ ⁣ The biggest clean energy consolidation in American history may happen on Donald Trump's watch — enabled by his own deregulatory policies. An administration trying to slow the energy transition just greenlighted the deal that locks it in.⁣ ⁣ https://lnkd.in/eX-zXnGB

Triodos Bank just launched a €300 million fund that treats nature as a profitable asset class. Not a charity. Not an offset. A return. This has been years in the making. In 2024, Triodos Bank and Fondaction - a Canadian investment fund - announced a partnership with the explicit intention to jointly accelerate positive change in global finance. The goal was clear from day one: close the finance gap for biodiversity and natural capital in developed markets. Last month, that partnership became a fund. Triodos Investment Management and Fondaction Asset Management have launched Value Nature Fund I - a closed-end natural capital fund targeting €300 million, aimed at transitioning farmland and forests to regenerative, closer-to-nature practices across North America and Europe. The fund brings together Fondaction's expertise in impact-driven investments in North American environmental markets. And Triodos's track record in European sustainable food and agriculture systems. Two complementary networks. Two continents. One investment thesis. The financial case is explicit: The firms say the fund comes at a moment of unmatched opportunity - creating value from the transition towards sustainable food and timber supply chains, hedging portfolios against volatility and inflationary pressures, and enhancing the resilience of critical economic sectors. This is not the language of philanthropy. It is the language of a portfolio manager. The fund intends to classify as SFDR Article 9 - the EU's most stringent sustainable finance label - with measurable impact KPIs across biodiversity and ecosystem services, climate mitigation and adaptation, and social wellbeing. Performance is tracked and outcomes are reported. Jonathan Coupland, Portfolio Manager at Fondaction, put it plainly: "Natural capital represents a structural response to ecosystem degradation, helping institutional investors address financial risks that can no longer be overlooked." That sentence matters. Not a values statement. A risk statement. The partnership's founding ambition was to demonstrate the scalability of solutions that address the dual climate and biodiversity crises with integrity - and that can achieve both financial performance and positive outcomes for nature. Value Nature Fund I is that demonstration. At €300 million scale. The question for every institutional investor watching: if Triodos and Fondaction see unmatched opportunity in natural capital and can build the vehicle for it - why not you too?

Only 25% of wealthy families successfully preserve wealth into the second generation. Roughly 10% make it to the third generation, and just 5% sustain that wealth into the fourth. Those numbers help explain why many Family Offices are being forced to rethink their structure, priorities, and long term purpose. The traditional image of the Family Office has long been tied to scale, exclusivity, and large internal operations. Dedicated investment teams, private legal counsel, concierge services, and layered governance structures became markers of sophistication for ultra wealthy families seeking greater control over their financial lives. Now, many Family Offices are moving in a different direction. Despite continued growth in global wealth, a rising number of Family Offices are downsizing, consolidating operations, or shutting down entirely. The shift has less to do with declining wealth and more to do with rising complexity, operational costs, and changing generational priorities. Maintaining a fully staffed Family Office today requires significant expense across talent, compliance, cybersecurity, technology, and administration. For many families, especially those below the ultra large institutional level, the structure no longer delivers the efficiency it once promised. The issue is rarely investment performance alone. More often, wealth disappears because of weak governance, lack of communication, succession failures, entitlement, and growing family fragmentation over time. Generational transition is also reshaping the Family Office itself. Second and third generation family members often bring different investment philosophies, levels of involvement, and long term priorities. As families spread across multiple regions and jurisdictions, alignment becomes more difficult and governance grows more complicated. In response, many families are adopting leaner structures focused on oversight and strategy while outsourcing specialized functions to external partners. Investment management, estate planning, reporting, cybersecurity, and administrative services can now be handled externally with institutional quality support. Technology has accelerated this shift, allowing smaller teams to operate with greater efficiency and visibility than ever before. The conversation is also becoming more intentional. Many families are no longer measuring success by the size of their operation. Instead, the focus has shifted toward governance, communication, succession planning, and long term family cohesion. In many cases, a smaller and more focused Family Office structure may be better suited for preserving wealth across generations than a large internal organization weighed down by complexity. The Family Office industry is still growing globally, but the model itself is changing. The future Family Office will likely be defined less by size and more by adaptability, clarity, and strategic coordination.

Over the last few years, SEBI has quietly but meaningfully expanded what asset managers in India can do. Debt passive regulations. Specialised Investment Funds. And now, Life Cycle Funds. These aren’t incremental tweaks. They expand the solution architecture available to investors. And for those of us building in this industry, it is incredibly exciting. The introduction of Life Cycle Funds under the new scheme categorisation framework is a big moment for goal-based investing in India. For years, we’ve told investors to align asset allocation to time horizon. Now, the structure does it for them. As the goal approaches, the portfolio gradually shifts from equity to lower-risk assets. It reduces behaviour risk. It reduces timing errors. And it keeps investors focused on the goal, not the noise or news. All within a tax-efficient mutual fund structure. Simple idea. Powerful execution. Very relevant for long-term India. From products to solutions, an evolution I am super excited about.

A new model in Payments is emerging: 𝐓𝐡𝐞 𝐒𝐭𝐚𝐛𝐥𝐞𝐜𝐨𝐢𝐧 𝐒𝐚𝐧𝐝𝐰𝐢𝐜𝐡 Here's how it works: For decades, international payments have moved through a network of correspondent banks. Each transaction passed through multiple intermediaries, from local to international correspondents and back again, taking days and incurring fees at every step. This system worked, but it was slow, expensive, and opaque. A new model is emerging — The Stablecoin Sandwich — where blockchain replaces those intermediary layers to enable direct, near-instant settlement. Here’s how it works: → The sender initiates a transfer in fiat (for example, euros). → An on-ramp partner converts those euros into a stablecoin such as USDC. → The stablecoin moves across the blockchain, serving as the settlement medium. → An off-ramp partner converts the stablecoin into local currency (such as pesos or reais). → The recipient receives funds in their local account, often in under 30 minutes. → This hybrid flow combines the compliance and familiarity of traditional finance with the efficiency, transparency, and programmability of blockchain technology. The scale of this transformation is already visible. Stablecoin transactions now exceed $7 𝐭𝐫𝐢𝐥𝐥𝐢𝐨𝐧 annually, surpassing 50% of Visa’s global network volume: https://bit.ly/49aC07G Stablecoins are becoming a fundamental layer for liquidity management, B2B settlement, and cross-border treasury flows. An entire ecosystem is forming around this shift: → 𝐄𝐧𝐭𝐞𝐫𝐩𝐫𝐢𝐬𝐞 & 𝐁2𝐁: BVNK, Bitwave, and Contact are helping global merchants manage stablecoin liquidity, compliance, and treasury operations. → 𝐁𝐥𝐨𝐜𝐤𝐜𝐡𝐚𝐢𝐧 𝐈𝐧𝐟𝐫𝐚𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞: Polygon Labs, Aptos Labs, and Chainlink Labs are building the rails that connect traditional payment networks with blockchain-based settlement. → 𝐖𝐚𝐥𝐥𝐞𝐭𝐬 & 𝐂𝐮𝐬𝐭𝐨𝐝𝐢𝐚𝐧𝐬: Dfns and BitGo offer programmable, secure wallet solutions designed for enterprises managing large digital asset volumes. → 𝐏𝐚𝐲𝐦𝐞𝐧𝐭 𝐏𝐫𝐨𝐜𝐞𝐬𝐬𝐨𝐫𝐬: Mural Pay, Fipto and Noah are integrating stablecoin rails into existing payment stacks, bridging traditional and digital commerce. → An exciting one, Breeze is reimagining the 𝐌𝐞𝐫𝐜𝐡𝐚𝐧𝐭 𝐨𝐟 𝐑𝐞𝐜𝐨𝐫𝐝 (MoR) model with programmable, blockchain-enabled settlements that occur instantly. What's happening is not a replacement of the financial system, but an upgrade. Traditional bank accounts are evolving into wallets. Money movement is becoming programmable. Settlement is shifting from days to seconds. The Stablecoin Sandwich represents a new layer of global financial infrastructure, one that merges the reliability of banks with the speed and transparency of blockchain. Source: Fipto, CB Insights, Dawn Capital, and kudos to Arthur Bedel for this great update! 👌 Find this helpful? [𝗿𝗲𝗽𝗼𝘀𝘁] Anything to add about this subject? [𝗶𝗻𝘃𝗶𝘁𝗲𝗱 𝘁𝗼 𝗰𝗼𝗺𝗺𝗲𝗻𝘁] Nice story, Marcel. Next! [𝗹𝗶𝗸𝗲]

How can businesses go beyond using AI for incremental efficiency gains to create transformative impact? I write from the World Economic Forum (WEF) in Davos, Switzerland, where I’ve been speaking with many CEOs about how to use AI for growth. A recurring theme is that running many experimental, bottom-up AI projects — letting a thousand flowers bloom — has failed to lead to significant payoffs. Instead, bigger gains require workflow redesign: taking a broader, perhaps top-down view of the multiple steps in a process and changing how they work together from end to end. Consider a bank issuing loans. The workflow consists of several discrete stages: Marketing -> Application -> Preliminary Approval -> Final Review -> Execution Suppose each step used to be manual. Preliminary Approval used to require an hour-long human review, but a new agentic system can do this automatically in 10 minutes. Swapping human review for AI review — but keeping everything else the same — gives a minor efficiency gain but isn’t transformative. Here’s what would be transformative: Instead of applicants waiting a week for a human to review their application, they can get a decision in 10 minutes. When that happens, the loan becomes a more compelling product, and that better customer experience allows lenders to attract more applications and ultimately issue more loans. However, making this change requires taking a broader business or product perspective, not just a technology perspective. Further, it changes the workflow of loan processing. Switching to offering a “10-minute loan” product would require changing how it is marketed. Applications would need to be digitized and routed more efficiently, and final review and execution would need to be redesigned to handle a larger volume. Even though AI is applied only to one step, Preliminary Approval, we end up implementing not just a point solution but a broader workflow redesign that transforms the product offering. At AI Aspire (an advisory firm I co-lead), here’s what we see: Bottom-up innovation matters because the people closest to problems often see solutions first. But scaling such ideas to create transformative impact often requires seeing how AI can transform entire workflows end to end, not just individual steps, and this is where top-down strategic direction and innovation can help. This year's WEF meeting, as in previous years, has been an energizing event. Among technologists, frequent topics of discussion include Agentic AI (when I coined this term, I was not expecting to see it plastered on billboards and buildings!), Sovereign AI (how nations can control their own access to AI), Talent (the challenging job market for recent graduates, and how to upskill nations), and data-center infrastructure (how to address bottlenecks in energy, talent, GPU chips, and memory). I will address some of these topics in future posts. [Original text: https://lnkd.in/gbiRs2mi ]

Our Private Markets Quarterly is out now. Here’s what we’re seeing across asset classes:   Private Equity: Deal and exit activity have picked up compared to last year, while #fundraising remains a significant challenge. Managers are increasingly focused on value creation through operational improvements, margin expansion, and revenue growth within portfolio companies.   Private Credit: While fundamentals remain solid, market dislocations are rising with spreads compressing and the likelihood of declining yields. Still, fundraising is robust, with larger, established managers dominating capital raised. Overall, #directlending remains an attractive option for investors, with yields still around 10% even as spreads have compressed.   Private Real Estate: We believe weakness in publicly traded US REITs is masking improving fundamentals in private US commercial real estate. Investors are capitalizing on price declines across several asset classes, while banks are also now more willing to lend to #CRE investors. Multifamily and industrial remain favored sectors owing to strong long-term demand. See the full report below from Jennifer Liu, Daniel Scansaroli, Ph.D., and Christopher Buckley, CAIA® with contributions from Leslie Falconio, Jonathan Woloshin, CFA, and John Murtagh.