CHILE Trends and Developments Contributed by: Felipe Díaz Toro, Victor Riadi and Ignacio Ruiz Rodríguez, EDN Abogados
it increasingly challenging to identify attractive opportunities. Goodsell also highlighted that within private and alternative assets, investors are primarily targeting ESG investments, with 41% focused on private equity and 39% on infrastruc - ture, ahead of real estate and private debt. Meanwhile, Mark Hempstead, Head of Alterna - tive Investments EMEA at J.P. Morgan, empha - sised the growing breadth of the alternative investment universe, which now includes a vast array of assets, strategies, frameworks, models, and vehicles. He noted that there are currently over 20,000 private investment funds and more than 9,000 hedge funds, with performance vary - ing significantly, according to data from the U.S. Securities and Exchange Commission. Hempstead further stressed that when investing in alternative assets, the first step is to establish clear objectives – whether to diversify the port - folio, mitigate volatility, protect against inflation, enhance returns, or achieve a combination of these goals. Geopolitical trends Regional political dynamics South America’s political landscape in 2024 has been characterised by instability, with several countries facing significant challenges. In Argen - tina, despite a more optimistic macroeconomic outlook following Javier Milei’s election, econom - ic crises and political unrest persisted during the first half of the year. Meanwhile, Venezuela con - tinued to struggle with severe political and eco - nomic issues, particularly after the controversial presidential election results in July 2024. These elections secured the government’s re-election for a six-year term beginning in January 2025. The instability in the region has had spillover effects on neighbouring countries, including
Chile. While Chile has maintained relative stability, the pervasive uncertainty across South America has prompted investors to seek safer options. This has led to a noticeable shift towards debt funds and low-risk financial instruments, as sta - bility becomes a priority amidst regional volatility. USA-China tensions In recent years, China has expanded its influence in Latin America through closer trade, invest - ment, and financial ties. However, according to The Economist, supported by insights from J.P. Morgan, the United States remains a key trading partner for many economies, particularly those in Mexico and Central America. As USA-China relations remain tense, Latin America finds itself navigating the influence of both powers. Governments in the region are striving to maxim - ise opportunities, particularly by diversifying sup - ply chains as companies reduce dependence on China. While this trend benefits certain countries – especially those near the United States with established manufacturing-for-export industries, like Mexico – competition from low-cost Asian economies, such as Vietnam, poses challenges that limit substantial market share gains for Latin America. That said, existing trade relations with China provide a foundation for recovery in the region following the economic recession caused by the COVID-19 pandemic. Renewed Chinese invest - ment in Latin American infrastructure projects also offers promising medium-term prospects. However, navigating issues like 5G development presents challenges for policymakers. While the United States may increase its efforts to strengthen ties in the region, China is expected to remain a key trading and investment partner for most Latin American countries.
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