Our managing director offers insight on day-to-day newsflow, spanning economies and markets worldwide. These comments appear regularly on his LinkedIn feed. We offer them here for wider community benefit.
Global Insights > Australia
The Messy Truth: Australia’s Reputation in Southeast Asia
9 September 2025
In the world of soft diplomacy, Australia may be faltering in Southeast Asia. The issue has important implications for the domestic economy. Realistically, can nearby countries be an engine of growth?
A spicy commentary published by the Lowy Institute—a prominent Sydney-based think tank—recalibrates the relationship between Australia and Southeast Asia. “Shared prosperity” and “deepening engagement” may mean something quite different in Canberra, than Hanoi or Kuala Lumpur. Bilateral grievances center on immigration policies and business standards. The author argues that Australia runs the risk of becoming irrelevant to these dynamic economies.
There is a countervailing view. An article published simultaneously in the Australian Financial Review spotlights comments by Australian Trade and Tourism Minister Don Farrell. “We have to inject new energy into regionalism and boost our already significant regional trading architecture to strengthen our resilience to shocks and economic coercion.” Jargon aside, Farrell advocates in part for more intensive commercial dialogue in Southeast Asia. Do Australian businesses have the cultural fluency to meet that challenge?
With a GDP close to $1.8 trillion, the Australian economy towers over many individual Southeast Asian nations. The sum is more meaningful than the parts, though. The combined heft of all Association of Southeast Asian Nations is near $3.9 trillion, making ASEAN the fifth largest economy in the world. For Australia, these linkages become indispensable to its economic outlook.
The debate on the impact of soft diplomacy ignites from the international teardown in Washington. The United States falls outside the list of Australia’s largest export destinations; America may loom symbolically larger-than-reality in the trade dialogue. Combined exports to Singapore and Thailand, for instance, are more prominent than those to the United States. Still, the impact of tariff penalties and the end of the de minimis ruling for small shipments sting, with Australians looking for a salve elsewhere.
Venture Development > Startup Ecosystems
Latam-GPT: Meet the Open Source AI of Latin America
7 September 2025
While the largest AI companies want you to believe their work reigns supreme, there is feisty competition in this business. Outflanking headline systems is an open-source effort based in Chile.
Venture companies in South and Central America get a jolt of life with a fast-evolving large language model called Latam-GPT. The project complements popular models, but with dynamic regional perspective. Importantly, AI systems often represent human biases in training data. As a sign of a complex worldview, there are more than 500 distinct indigenous languages in this region, as well as Spanish and Portuguese.
Latam-GPT sprouted from a Chilean policy initiative that created the National Center for Artificial Intelligence, commonly known by the Spanish acronym CENIA. With training data from 20 countries, including those in South and Central America, the Caribbean, and Spain, the model now has more than 50 billion parameters with context pulled from 2.7 million documents. In its current form, analysts suggest that Latam-GPT is broadly comparable to the GPT-3.5 model released by OpenAI at the end of 2022.
Is Latam-GPT a duplicative effort at a time when large language models are increasingly widespread? Processing training data in a region where structured information can be evasive is a Herculean task. While Brazil and other developing economies are deep into digitalization, Ecuador, Bolivia, and Venezuela are not. There is also a seemingly endless array of indigenous languages, including Guarani, Rapunati, and Mapuche. In the race to commercialization, the largest systems based in mature economies have likely overlooked this enormous potential.
Because Latam-GPT is an open-source model, there are myriad use cases that will benefit from its roll out. Companies with a wide social fabric, such as healthcare and education, may be among the first to gain traction from this culturally-responsive effort. Other applications might include credit scoring in banking or behavior analysis in retail commerce, given market-by-market features.
With an insatiable demand for computing power, further evolution of Latam-GPT will depend on the backbone provided by the supercomputer center at the University of Tarapacá in northern Chile. The national government is investing some $10 million in the facility, helping to affirm Chilean leadership in the field. The Latin American Artificial Intelligence Index, a public-sector assessment of AI development and readiness, ranks Chile first in the region, followed by Brazil and Uruguay.
Islamic Wealth > Special Situations
Southeast Asia’s Islamic-Finance Market Draws in Non-Islamic Players
24 August 2025
The infrastructure of Islamic banking includes myriad service providers. Many benefit from global opportunities. These efforts amplify industry features like risk-sharing and financial inclusion.
Ongoing growth of Islamic finance entices Western institutions. The move further reflects the maturity of the banking industry in traditional markets. Worth emphasizing: The perception of Islamic finance globally becomes more-and-more substantial.
Mambu, an Amsterdam-based company working as a service provider to banking institutions, now looks farther afield to enlarge its client base. Malaysia and Indonesia are in the crosshairs. Depending on size of commitment, this initiative could easily become a multi-million dollar business. We suspect the return-on-investment will be meaningful, given the combined potential of digital banking and Islamic banking in the region. “We just see it growing and growing, and I think that’s a factor in why governments and regulators have been so supportive,” asserts a Mambu executive.
However awkward to explore, this case study could be another example of deflated expectations. Limited-scale strategic plans quickly grow into outsized, if not uncomfortable, outlays as business partners and regulators demand more-and-more local-market commitment. And seemingly innocuous knowledge-sharing can become a form of technology transfer, giving rise to local-market competitors with ingrained business networks.
One obvious benefit for a European counterparty is that there is probably less cross-border hostility toward their products and services than there may be for a US company. Washington-induced changes in global trade activity have largely impacted manufactured goods, but does a breakdown in the flow of global services loom on the horizon? Certainly, European firms operate internationally with a greater comfort zone.
Hospitality Finance > Institutional Investors
Hotel Investors in Italy Seek the Next Deal
24 July 2025
The new Orient Express La Minerva in Rome is stunning, with a classic, er, cheap room selling for around $1,600 a night, including bespoke Italian linen. The real action in the hotel sector, though, may be both outside Rome and beyond the ultra-premium tier. We suspect the rates at La Minerva will discreetly collapse once the nearby Nobu, Four Seasons, Mandarin Oriental, and Corinthia open their doors.
As a major tourist destination and with the bulk of hotels still running independently, Italy is a workshop for trends in hotel investment. The impact of the largest global firms is random, if not disparate, as they scramble to expand their footprint.
The glut of luxury hotels in Rome, Milan, and Florence suggests that the most prominent deals are down market, especially in the serviced-apartments and student-housing segments. Overbuilding in the ultra-premium tier spotlights a rebound from a pandemic-induced collapse in the business. Luxury hotels can take anywhere from three-to-five years to open.
The student-housing angle is noteworthy, in part because of complementary headlines. Just this month, Australia-based Macquarie announced that it was buying two student-housing platforms in Europe for a total of 12,000 beds. The spark here may be as much about social responsibility as financial prowess. Among hotel investors, stable returns can be fleeting.
The Italian South is resonating more and more with investors. One reason is the role of public grants from regional governments, defraying the costs of expansion, modernization, and renovation. Calabria, in particular, is pursuing this development model as a long-term approach to building its hospitality industry. The region has a significant under-tourism problem.
Essential Ideas > Company Valuation
Conagra Expects Worsening Inflation to Hurt Sales This Year
20 July 2025
In some respects, Conagra Brands is a dull company. They sell frozen foods such as Healthy Choice meals and popular snacks like Orville Redenbacher’s popcorn. The enterprise is responsible for as much as 5% of all grocery sales in America. Importantly, their earnings outlook signals underlying economic turbulence.
Profit expectations at Conagra Brands are tied in part to company-specific issues. Other challenges are macroeconomic in scope. These big-picture problems mimic hurdles faced by companies nationwide. Are investors losing sight of real-economy upheaval?
Conagra is an S&P 500 stock (NYSE: CAG) that is a dominant player in packaged food. Some analysts refer to the company as a “titan.” Notable brands include Vlasic pickles and Duncan Hines baking mixes. Their business strategy is a mix of volume and margin decisions. Because many of the firm’s products can be viewed as discretionary purchases by consumers, the business has a more cyclical, than defensive quality, in our view.
Conagra expects to see stagnant earnings this year. Its chief executive clarifies that the enterprise is seeing inflation, foreign-exchange headwinds, and consumer caution weigh on results. He also singles out “supply challenges;” the concept is code for US tariff policies. In total, these issues are a volatile, unbridled mix, impacting firms across many sectors. Conagra becomes a proxy for corporate America.
In the minds of investors, selling foodstuffs does not qualify for the same sort of elevated narrative as developing advanced chips or robotic sensors. Yet mainstream companies offer a pointed reminder of the cadence of everyday business. That tempo is increasingly arrhythmic.
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