An interview series spotlighting global tech influencers, disruptors, visionaries, and of course, innovators.
Season’s Greetings, Readers! Best wishes for a prosperous, peaceful and healthy 2024 to you and your loved ones.
It’s that time of year again for the annual EKMH Innovators’ predictions! As the saying goes, the past is prologue: click and read past predictions from 2023, 2022, 2021, 2020, 2019, 2018 crypto, 2018 blockchain, 2018 fintech and 2017 marketplace lending. Many thanks to the global experts who shared their insights and visions for 2024.
This year’s edition continues to cover a gamut of sectors, topics and trends, including AI, digitization, technology, omnichannel experiences, fintech, cybersecurity, bitcoin, Web3, corporate ESG reporting, asset management, inflation and interest rates. Uncertainty around interest rates and whether they may be held at levels that spark a soft landing, if not a recession in certain developed markets, is a central focus for the Group of Boutique Asset Managers (GBAM), who at the same time noted a “sniff of opportunity”: “Emerging Markets could be winners from US Fed rate cuts alongside local elections leading to policy changes and economic reform.” Ongoing conflicts in Europe and the Middle East and upcoming elections loom large— more than half the world’s population will be going to the polls in 2024. Traditional asset classes and opportunities in diversification into alternatives and convertible bonds were also top of mind this year. Let’s lead with what the world always needs, more empathy…
Customer Experience
Customer Experience Specialist / Corporate Transformation Strategist Amelia Hernández: “We all agree that today’s digitalized consumer is looking for unique experiences, and creating such hyper-personalized realities is within reach more than ever thanks to generative AI. Empathy will emerge as a core capacity not just for businesses to be able to better understand and anticipate their consumers, but also as a key tool to engage talent and genuinely position companies as sustainable, responsible entities. Many companies are scrambling to reconnect with their customer base, and this will drive a rise in budgets dedicated to Customer Experience related projects. In order for this to be truly impactful on the balance sheet – and lead to meaningful experiences for clients—businesses must offer more than a variety of digital channels. Authentic omnichannel experiences may finally be within reach as AI promises to deliver hyper personalization, but without the human touch to process what is relevant to both companies and their clients, there is a risk of saturating already distracted consumers. NPS (Net Promoter Score) and CSAT (Customer Satisfaction Score) have become metrics of choice to measure the impact of CX initiatives and this requires a deeper understanding of what drives satisfaction to create a truly seamless experience. In short, if we want consumers to fall in love with our brands, we have to be able to empathize with what they love.”
MoneyLion Global CTO Phill Rosen: “Consumers already see their financial management app as the go-to place for all things finances. As we head into 2024, these expectations will begin to involve apps not just storing data but providing practical advice and solutions to consumer problems, going beyond conventional marketing functions. The integration of AI will play a crucial role in enhancing these apps’ ability to understand and address individual needs next year.”
Mass Fintech Hub Board Member / MassMutual Head of Enterprise Technology & Experience Sears Merritt: “In 2024, AI will continue to evolve and integrate into our daily lives at a rapid pace. As companies grow in their understanding of actionable ways AI can be used that are both effective and appropriate for their stakeholders, it’s important they also focus on adhering to legislation and setting their own ethical standards – as we have – to protect their businesses and consumers. As a mutual company created to help people secure their future and protect the ones they love, MassMutual’s priority is our policy owners. We use AI in relevant ways to efficiently and responsibly drive our digital transformation while providing value for policy owners. The year ahead is all about tapping the power of AI for personalized and pertinent customer experiences, ultimately improving customer service and driving growth.”
Cybersecurity
Upfort CEO / Co-Founder Xing Xin: “As the largest-at-risk segment in the market, the focus will be on small and medium-sized enterprises (SMEs) in the new year. 2023 was a year of growth and stability in the cyber security industry. However, we suspect underlying issues in the market, including increased attacks and contractual requirements from business partners, will cause a major shift in 2024, leading to higher cyber budgets for SMEs. 2024 will see an increase in attack volume and sophistication as cybercriminals further adopt AI to create more convincing malicious emails and accelerate malicious code development. We expect financial losses from cybercrime to continue to grow as the vast majority of SMEs are underprotected and underinsured.”
Mass Fintech Hub Board Member / Citizens Financial Group Vice Chair / Chief Experience Officer Beth Johnson: “I’m anticipating a surge in FinTech innovations aimed at safeguarding financial transactions in 2023. Given the rapidly evolving and expanding digital landscape, fraudsters are looking to capitalize on vulnerabilities. We’re already seeing FinTechs respond to the increased fraud risks with a multi-pronged approach to detect and mitigate fraud. Partnerships—from Fortune 500 companies to FinTech startups—offer us the opportunity to explore the newest technologies in the market, which makes them a significant part of our innovation efforts. Whether it’s fraud-prevention education aimed at customers about the latest scams and tactics, or creating a replacement for multi-factor authentication, protecting customers and their data will be a major area of focus across industries in the year ahead.”
Fintech / Banking
BankTech Ventures MD Carey Ransom: “For major trends shaping the community banking industry in 2024, deposits and liquidity are still top of mind, as well as interest rates when it comes to their lending and investment portfolios. The ones holding a lot of bonds and fixed price loans are scrambling to maintain viability as a bank. This will test a lot of banks and could lead to a new wave of M&A activity in 2024-25. What excites me most about emerging trends and innovations in fintech is that community banks will more broadly embrace ‘high touch and high tech’ as an industry and see clear examples of better and more personalized relationships through better data and tools that support their teams. These culture shifts will help them attract more customers who get frustrated with large banks. In terms of regulatory changes and compliance, regulatory change continues and always seems to be more and more costly. Finding smarter and more efficient ways to comply will be welcomed. This will include how regulators monitor and even conduct exams, which are particularly costly and disruptive for smaller banks today.
Fintech Sandbox Co-Founder / Vantage Ventures Executive Director Sarah Biller: “Even with the iconic launch of ChatGPT, 2023 showed us that most every innovator – and especially fintech founders – faced material risks to their progress, ironically from a protracted period of abundant capital. I see 2024 answering some of the many questions 2023 left us all with: For one, how will regulators, central banks, and investors overt stalling financial inclusion by hitting the brakes on innovation in payments, lending and banking among other areas? I’m an outlier, but I see 2024 being the year we move forward and align on prudent oversight of an ever more rapidly digitizing financial services sector. Secondly, are we investing for a world that is, or are we investing for the world we want? I think we’ll see this question at least partially answered in 2024 as a meteoric rise in institutional private markets, equity and credit scaffolds to venture capital to spur fintech innovation forward. Lastly, 2023 showed us it’s really hard to know who to trust. I think 2024 will be the year we double down as a financial services industry and develop systematic solutions that provide transparency and identity.”
Fintech Sandbox Executive Director Kelly Fryer: “Given the bank run at the beginning of 2023 and the stark realization by companies that they need to have more than one bank, in 2024 we’ll see the banks continue to compete for early and late-stage startups’ wallets. Business banks will be heavily focused on building up value-add services and each carving out their own niche for startup financing products. The race is on! At the early stages of the market, we'll see an influx of startups building outside-the-box funding solutions for the private markets, creating access for new investors. We already saw in 2023 an increased focus on private market solutions and products, even coming from Pre-Seed and Seed stage companies, due to the economic climate. That’s going to persist and even increase exponentially in 2024, as a direct response to the funding challenges we’ve seen this year. Companies are trying to create new funding opportunities for the innovation economy as traditional funding sources are holding back. Big companies will still not be ready to implement Generative AI into their public products. Especially in highly regulated industries (financial services, healthcare, etc.), enterprises will still be struggling with major questions of risk in their adoption of customer-facing AI. Instead, they’ll find ways to utilize the technology internally or in a behind-the-scenes process for a product before it gets up to the last mile. This lag in implementation will greatly impact private markets in their ability to sell to these core institutions and gain necessary scale.”
Apiture Innovation EVP Daniel Haisley: 1. AI will be increasingly personalized, and companies like Google and Apple will evolve their AI-based tools (Bard and Siri) to enable digital assistants that can have extensive dialogues via voice commands with consumers. The banking industry will follow suit, developing AI-based technology that will help financial institutions deliver highly personalized, proactive, and consultative digital interactions with customers. 2. Bank M&A will see an uptick as higher rates, cost of fund challenges, and delinquency rates increasingly impact the space. Focus will continue on deposit growth and asset tightening. As such, the ability for financial institutions to support new account opening digitally at scale will continue to be a high priority. 3. There will be a consolidation in the Banking as a Service (BaaS) space, as fintechs will increasingly pool into a smaller number of specialized banks. Most financial institutions teetering on the edge of whether or not to get into BaaS will opt away from it to avoid the regulatory pressure despite the need for new deposit streams. 4. As guidance is established for data sharing via Dodd-Frank Act Section 1033, financial institutions will begin the scramble to meet new requirements to empower their customers to control access to their data, and for the financial institution to have the technical infrastructure to deliver that information via evolving industry standards (likely FDX).
Green Check Co-Founder / VP of Knowledge Paul Dunford: “Hopefully we will see a version of the SAFER Banking Act pass, but I think the bigger bang for the buck politically would be rescheduling or descheduling marijuana. Regardless, even financial institutions have created a strong precedent that cannabis banking can be done without invoking the ire of regulators. Financial institutions are cautious, as you’d hope they’d be with your money, so they are often hesitant to be the first to take on a risk like cannabis banking. But now we’ve had several years of positive examples that banks and credit unions can look to and more of them will realize they can do this successfully and in a compliant way without having to wait for the federal government to put on paper what’s been happening safely in practice for years now. More players means market competition for the first time, meaning the old way of banking cannabis - essentially a place to store cash and not much else - is being sunset. To enter the market or stay competitive in this new landscape, financial institutions need to expand their product and service offerings to include things like offering payroll services, business debit cards, online banking, and more. These things seem really normal to folks outside of the industry who don’t realize that those are still luxuries to many cannabis operators, luxuries that are now becoming commodities. Market pressures will also push fees down, as we’ve seen in Massachusetts, where a handful of financial institutions have already dropped their account fees to $0. There are ways to make up for that lost revenue (look to lending, for example) and the ones that are willing to evolve with the times will be the ones that succeed.”
Amdocs SVP / Head of Financial Services Americas Zur Yahalom: “In 2024, the demand for improved customer experience in family banking will firmly take hold as banks navigate the growing demands of multi-generational households. As the Baby Boomer generation ages (20% of the US population), Millennials will begin caretaking their elderly family members (an estimated 10 million people in the US alone) while Gen Zs will enter the banking world in a bigger way. Banks that can create and tailor products for households that have a wider range of needs - from planning for healthcare costs, to first checking accounts, to saving for college, and on - will be poised for success.”
Corporate ESG Reporting
Visual Lease Principal ESG Solutions Advisor Bill Harter: “Only one-third of companies disclose quantitative or qualitative links between climate-related impact in their financial statements, suggesting that climate risk and impact is not being considered equally within financial performance. Similarly, nearly 70% of senior finance executives at enterprise organizations say that their teams are not fully prepared to track and measure the environmental impact of their leased and owned asset portfolios. Given the growing interest in ESG, as well as evolving environmental reporting requirements from various regulatory bodies, including the State of California and The International Sustainability Board (ISSB), this gap in financial reporting is extremely concerning. While we don’t have a firm date for when the SEC will announce its official requirements, one thing is clear – companies can get ahead of these regulations by getting a firm handle on the related data. Because nearly 40 percent of global carbon dioxide emissions originate from real estate-related assets, we expect to see Finance leaders prioritize technology that supports united data views across all teams that handle leases and their related records. Doing so early on in 2024 will enable these organizations to centralize and analyze consumption data of greenhouse gas emissions and know that when it comes time for reporting, they are drawing from a complete and auditable view of their environmental impact.”
IPO Market
OpenExchange CEO Mark Loehr: “This month of December we've seen the most ‘Test the Waters’ meetings in one month that I can remember. ‘Test the Waters’ meetings are pre-IPO meetings with companies and investors to ‘test’ the appetite for the company’s investment thesis. The combination of this volume of preparatory meetings and rollover of global interest rates bodes well for the new issue market in the first half of 2024.”
Bitcoin & Cryptocurrency
ARIA Co-Founder / Co-CEO Jonathan Solomon: “As we approach 2024, the contours of the investment landscape are shaped by a blend of macroeconomic factors, technological evolution, and geopolitical dynamics. From a crypto and Web3 perspective, 2024 foresees pivotal moments with the emergence of Bitcoin Spot ETFs and the upcoming halving of Bitcoin. Simultaneously, the crypto market is heading towards more regulation, and the emergence of new market standards is becoming a strategic imperative. In this stance, ARIA recommends embracing data analytics as a decision-making pillar and selecting investments based on more fundamental analysis. Meanwhile, we should see an increase in data analytics adoption for investment decisions moving into 2024 with the institutionalization of his market. Furthermore, real-world asset tokenization is a significant trend in the digital asset space that has been gaining traction in recent years. The year 2024 looks to be one of the most promising times in the history of financial markets, with the introduction of stocks, bonds, real estate, private equity, and many other new types of financial assets into the digital space. According to ARIA, this case opens up a door for crypto assets to be adopted and legitimized by a wider audience.”
ARK36 Chairman Mikkel Mørch: “Binance’s waning dominance highlights the rising preference in the market for decentralised alternatives; their recent market-share slide comes as investors, wary of centralised exchange vulnerabilities, exposed by regulatory and legal issues, pivot towards decentralised finance (DeFi) and decentralised exchanges (DEX). These offer better control, privacy, and security and have already gained traction; they are likely to see further adoption and value, with market dynamics favoring user-centric financial solutions. DeFi and DEX will outpace their centralised counterparts, as users prioritise autonomy and transparency. This shift will be a driving force in the ongoing bull run, but this evolving landscape also underscores a broader transformation in the crypto space, where decentralised ecosystems are becoming the bedrock of trust and innovation.”
TradeStation Head of Brokerage Solutions Anthony Rousseau: “There is a bullish case for Bitcoin in 2024 for these 5 reasons. The expectation would be for a positive return year with a potential to reach previous all-time highs to test and possible move to new highs. The following factors will be crucial for driving this view: 1. FASB rule change for valuing crypto assets: This significant change involves the adoption of “fair value” accounting for crypto assets held on corporate balance sheets. This opens the door for corporates to have a path to add Bitcoin to the balance sheet as a reserve asset, as MicroStrategy has adopted. These new account rules are mandatory after December 15th, 2024, a net positive for corporates and the asset class with opportunity of inflows from this segment. 2. Bitcoin Spot ETF: This event is important for institutional adoption; many asset allocators and asset managers look at vehicles like ETFs to use in the allocation process. There is still a long road for education on how this would fit into a 60/40 portfolio but will likely be worked out by all the math wizards. This event would be considered a net positive for new capital inflows into the asset class. 3. The Bitcoin Halving: The Bitcoin halving takes place every 210,000 blocks, and we are expecting this to take place sometime in the beginning half of 2024 around April 20th. This is a very well anticipated event that creates a supply shock for Bitcoin with the reduction of supply that is issued over the next 4 years. We will go from 900 Bitcoin issued per day down to 450 issued per day. In general, based on historical activity we tend to see this reflect in price of Bitcoin 6-9 months after the halving process. This can create a supply demand imbalance and have a positive impact on price from a historical data look back. 4. Global Central Banks Shifting Policies: The Federal Reserve has paused its rate hiking cycle and central banks around the world are following. It’s plausible to believe we have reached the heights of this tightening cycle. For risk assets to get a sustained bid we will need to see a path forward with lower rates and an end to quantitative tightening. We are potentially entering in 2024 with an opportunity for a net positive market liquidity. Bitcoin is a pure reflection of net liquidity in the markets; we would need to see positive liquidity to support any substantial bullish activity. 5. US Election Year Effect: This could be a stretch, but throughout its existence, Bitcoin has performed positively on US election years. In 2012 achieved approximately 160% returns, in 2016 achieved approximately 123%, in 2020 achieved approximately 303%. In general, looking at risk assets including the stock market, Bitcoin achieved positive returns 17 of the past 23 elections. It’s plausible to see market drivers pushing positive outcomes for risk assets in 2024.”
YouHodler CEO / Co-Founder Ilya Volkov: “Trends to watch include: 1. Regulators are understanding more about crypto and how it coexists with traditional financial markets. In some aspects, they are tightening their grip on crypto with new rules and policies, which I believe is good for the entire financial ecosystem. New frameworks like MiCA and the recently published new FINMA Guidance on Staking Services will help make the industry healthier and more sustainable. 2. More financial institutions are engaging with crypto or Web3 technologies. Banks like Raiffeisen Bank Austria and even Swiss state banks are introducing crypto offerings. Institutions like Societe Generale are also expanding their scope to include stablecoin operations. This shift signifies more than just traditional entities entering the market; it represents a broader trend of consolidation. A key aspect of this trend is major financial institutions’ need for technologies developed by crypto-native companies... Consolidation of traditional and Web3 fintech will become even more prevalent, indicating a significant shift in the financial industry. 3. The upcoming BTC halving differs notably from previous ones, as we will see significant involvement of institutional investors. Unlike in the past, institutional players are now committing much more to the crypto market. I agree with analysts who predict that the upcoming bull run will be driven primarily by these institutional players. 4. CeDeFi solutions powering Web3 fintech. The evolving synergy between cryptocurrency and traditional finance institutions will attract more attention from companies of all sizes. As the concept of Web3 fintech advances, ‘CeDeFi solutions’ emerge as a secure and innovative alternative to traditional practices.CeDeFi solutions combine the advantages of decentralized finance (such as earning interest on cryptocurrency assets, streamlined trading, and access to loans) with the stability and regulatory safeguards of established financial institutions, acting as a bridge, offering a balanced approach to addressing many contemporary challenges in the financial industry. 5.The introduction of spot ETFs will mark a pivotal moment for many investors previously hesitant to enter the crypto market. The widespread approval of these ETFs, which is likely to happen in early 2024, is expected to attract a new segment of informed and strategic investors, who will bring a considerable amount of “smart money” into the market. This will profoundly transform the crypto investment landscape. 6. Volatility is here to stay. The crypto market, while more stable than in its early days, is still notably volatile. As we head into 2024, I believe this trend will continue, particularly with the rise of emerging technologies like AI.
Asset Management
MAPFRE CIO / GBAM Co-Founder José Luís Jimenez: “History, like economics, is cyclical and bearing in mind that next year more than half of the population of the World will go to the polls, despite many of the ballot results being already known, uncertainty is all over the place However, most investors are suffering some kind of Peter Pan Syndrome: ‘A soft landing lies ahead, and it will be excellent for stocks and bonds’; ‘Interest rates cuts are around the corner next year and thanks to a strong labour market, Covid’s savings and cheaper finance, the World economy will do well.’ But all experienced economists know that predictions are one thing and reality another. Many things could go wrong next year. High fiscal deficits and high national debt are big problems to sort out for most developed economies. The War in Ukraine and in the Middle East— beyond the enormous human tragedy— have their implications too in terms of food and energy prices.”
Aubrey Capital Management CEO Andrew Ward: “The three global factors that will most likely affect our business in 2024 include a normalising of global inflation and interest rates, putting cash back in the pockets of ordinary consumers, thereby boosting the revenues of the sorts of companies in which we invest; the ratcheting back of inter-state conflict and the threat of such, creating more stability for trade to flourish and ordinary humans to live their lives, travel and spend hard-earned cash as they wish; and the sensible development and growth of AI (and other appropriate tech) that benefits modest businesses like ours, allowing us the scope to do more routine data processing (of various types) inhouse, thereby depending less on expensive near-monopolistic ‘providers’, ultimately allowing us to dramatically reduce fees and improve net returns to our clients. We’re looking forward to seeing the developments in these key areas and believe 2024 will be a prosperous year for our business and partnerships, and a better year in general for the industry.”
SKAGEN Funds Chief Executive / GBAM Chairman Tim Warrington: “This year, in contrast to last, the consensus seems to be a soft-landing over recession; albeit with most hedging, noting that much needs to continue to go right to both deliver and sustain it. Putting aside elections on both sides of the Pond, too much remains at stake to expect significant policy changes. The narrow basis to success in 2023 – the AI-charged Magnificent Seven delivering more than half the market gains – will not endure ad infinitum. And interest rate tops in the developed markets will be supportive to emerging markets. So active managers should have advantage, especially those investing in small- to mid-caps and further afield. What the unknown unknowns might be is another matter, so my advice remains the same: know your fund manager well and run sensibly diversified investment portfolios.”
LarrainVial Asset Management CEO Ladislao Larraín: “The shift in the Federal Reserve’s monetary policy cycle is key to improving asset returns in emerging economies. The accelerating decline in inflation in the United States and globally has made it likely that the Fed’s rate cuts are likely to materialize before mid-2024. In this context, we are highly optimistic about political and macroeconomic developments in Latin America, where recent elections have been won by pro-free-market forces. This, coupled with very negative poll standings for most of the leftwing coalitions in power, promises to reverse the pink tide in the region. Additionally, the region’s countries have favourable macroeconomic stories such as the agro- and oil export boom in Brazil and nearshoring in Mexico. In a context of elevated global geopolitical risks, Latin America offers a significant option for assets in a region that looks more stable, with many orthodox central banks that raised rates early and now will lead the easement process, in addition to having democratic institutions that have shown their strength in recent history.”
Itaú USA Asset Management CEO Charles Ferraz: “Looking ahead to 2024, the US markets remain influenced by interest rates fluctuations, government spending, and potential election-related volatility. Caution is advised for the US equity markets, but emerging market equities should benefit from the scenario. In Brazil, the markets anticipate potential gains as global interest rates fall, combined with the ongoing local adjustments. With a robust current account, favourable geopolitical positioning, and growing capital markets, Brazil becomes an attractive destination for investments. However, the fiscal deficit continues to be a challenge. Overall, this dynamic sets the stage for optimism in both the stock market and the local currency (BRL). The only certainty we have about the outlook is that surprises are inevitable. Hence, the crucial focus on diversification, resilience, and seizing opportunities persists. Investors must meticulously construct portfolios and allocate resources wisely, prioritizing professionals showcasing expertise in navigating the complexities of dynamic and volatile markets.”
First Avenue Investment Management CIO / Principal Hlelo (Lo) Giyose: “Local developments in policy could have a significant impact on return expectations, as South Africa’s GDP has been in decline since 2011 even as it faces a rampant public service wage bill funded by debt that has reached a limit. It is time for the 33% of unemployed South Africans to go back to work (productively) to drive both pension fund flows and economic growth per capita. The reason we are pointing this out is that 2024 is a watershed year where the governing party, the African National Congress, is projected to lose its majority in government. The country can now focus on reforms from parties that have been critical of the economic malaise of the past 13 years. We think we are past the worst, (rising rates), and the odds are favourable for a soft landing in the developed world. We see commodity prices stabilising, Emerging Market currencies stabilizing after a year in which they went into freefall, and government financing costs stabilizing. All of these would bode well for cyclical asset classes that drive wealth creation in South Africa (property, equities, and bonds).”
Chartwell Capital CIO / Founder Ronald Chan: “Elections next year in Taiwan and the US presidential election are particularly important events affecting the local business environment, along with rates decisions by the US Fed affecting asset prices and stock markets in Asia. The possibility of a global economic slowdown could pose challenges for companies in Hong Kong, however, it’s important to note that challenges are often accompanied by opportunities, and businesses that can adapt to changing market conditions may find new avenues for growth and innovation. The local market faces specific conditions: valuations of Hong Kong local stocks are at their lowest in 30 years; dividend yields are in many cases at their highest, ranging from 8%-11%; and while foreign capital has been cautious due to concerns around China, mainland Chinese capital may be overlooking local businesses. While Hong Kong may face challenges such as geopolitical uncertainties, interest rate fluctuations, and a potential global economic slowdown, there are opportunities for value investors in the local stock market. The low valuations, high dividend yields, and overlooked nature of Hong Kong local stocks present a safe haven for investors seeking sustainable cash flow and reliable management in 2024.”
Farview Invest Partner Paulo Del Priore: “Amid a global investment landscape still marked by increasing complexity, heightened geopolitical tensions, and volatility, there is a shift in the correlation between equity and bonds, which challenges traditional investment approaches, such as buy-and-hold, underscoring the importance of incorporating alternative risk premia strategies into traditional portfolios. In 2024, we anticipate wider spreads in absolute returns, contributing to a more positive outlook. Our key strategies for navigating 2024’s complexities include prioritizing liquidity to facilitate rapid liquidation of significant portions of our portfolio when necessary; constructing a portfolio with low-beta, market-neutral, and uncorrelated assets, aligning with our goals of capital preservation and diversification in an unpredictable market; and as the dispersion of performance in alternative strategies continues to increase, we believe selecting and combining the right specialists/ investment teams will be crucial.”
Fisch Asset Management Chair Dr. Pius Fisch: “Amid a “tug-of-war” between increasing risk of recession and simultaneously falling interest rates we believe that 2024 will be a promising year for fixed income, and for EM corporates in particular. Investment-grade corporate bonds should be able to benefit strongly from an easing of monetary policy, but high-yield companies should also stand to gain from potentially lower refinancing rates. In addition, solid fundamentals and continued low default rates represent a robust backdrop. In the emerging markets complex, we also see very attractive carry for higher-quality companies with strong balance sheets and short maturities. We anticipate strong performance from convertible bonds in 2024, both on an absolute basis and relative to equities and fixed income. The asset class offers significant convexity and positive yields, providing advantageous upside capture in our baseline scenario of a normalisation of the financial environment. Many convertible bonds are trading close to the bond floor, reinforcing their resilience against a potential further deterioration in economic conditions. This scenario could materialise in the first months of 2024. The catch-up effect of small and mid-caps, coupled with the support from lower rates and an increase in primary market activity, are likely to serve as positive drivers for the asset class throughout the year.”
Lonvia Capital Partner / Director Francisco Rodríguez d’Achille: “Like in 2022, so far this year 2023 has left a significant de-rating in our portfolio in terms of valuation. A pause in the interest rate policy by the central banks will bring a return to fundamentals and with it a strong revaluation of companies that are growing structurally without depending on exogenous factors, despite the fact that they have been heavily punished in terms of price and valuation. Today there is still a significant distortion, which reinforces our thesis that if the central banks relax the message, we could find ourselves facing a historic opportunity for the coming months in our strategy. The most penalized sector in 2023 is Medical Technology; we are identifying encouraging signs from some leading companies within this segment. The Semiconductors segment continues to be driven by needs in terms of Artificial Intelligence, data storage (data centers), computing power, and energy transition. In the field of Industrial Software we have recently introduced a new company in the segment of Construction Software. For Industry 4.0 and Automation we are in the Intralogistics Automation segment.”
*Disclaimer: The views and opinions expressed in this series are those of the speakers and do not necessarily reflect the views or positions of any entities they represent.
Still looking for gift ideas? It’s not too late —check out the Innovators’ book recommendations!
Happy 2024!
Search below or MuckRack to explore the EKMH Innovators Archive. Don’t miss an Interview or prediction! Be an active part of the conversation.