Europe is experiencing a significant economic shift amid ongoing trade tensions initiated by the United States. Mexico has the potential to serve as a strategic partner in this evolving economic landscape, as highlighted by Arcano Partners, an independent Spanish firm specializing in private markets and fixed income.
During an event hosted by Arcano in Mexico City, the firm presented its investment outlook to Mexican investors, emphasizing the dynamism of the mergers and acquisitions (M&A) market in Spain and Europe, as well as the appeal of European credit. Pedro Hamparzoumián, Partner and Head of Investor Relations, delivered a presentation titled “The Resurgence of European Fixed Income: A Winning Strategy in the Current Environment.”
“We believe that in the current global economic climate, reinforcing economic ties between Europe and Mexico is essential. We see Mexico as a key player in the North American region,” Hamparzoumián stated during his presentation, which focused specifically on opportunities in short-duration European fixed income against a backdrop of geopolitical risk concerns and their impact on debt markets. He noted a rebound in yields on long-term benchmarks.
Arcano Partners argues that the European economy is receiving favorable winds for investment, anticipating a low-growth but non-recessionary environment supported by low inflation, the European Central Bank’s (ECB) continued rate-cutting cycle, lower oil prices, and strong consumption and labor markets in the region.
In this context, Arcano sees short-duration, high-yield fixed income and private assets as the most suitable solutions for investors seeking exposure to European assets. The expert emphasized qualities such as high credit quality (the average rating in Europe is BB-, compared to B+ in the U.S.), sectoral defensiveness versus the more cyclical U.S. bias, and the lower volatility of European market assets compared to their U.S. counterparts. Additionally, he noted that both European and U.S. bonds and loans have shown high predictability in returns, as this asset class has never recorded consecutive years of negative returns in the past 22 years and has consistently delivered double-digit positive returns following a negative year.
Finally, the expert pointed out that capital flows into the region are at decade lows, which he views as an attractive entry point for foreign investors.
Within the corporate world, Arcano has identified several long-term trends, including energy independence from Russia (in place since the outbreak of the Ukraine war in 2022), increased investment in the defense sector, and closer trade ties with China, partly as a result of global trade tensions caused by the U.S. tariff war. However, the firm does not foresee corporate risk in the medium or long term: balance sheets are solid, and leverage is not excessive. No sectors appear particularly damaged by any specific dynamics, although there is some concern regarding financing and fiscal policies in the eurozone, which again tilts the balance in favor of European private debt, seen as a higher-quality and lower-volatility asset compared to its U.S. counterpart.
“Europe is a region of opportunity for investment, and Arcano plays an important role in that objective,” Hamparzoumián reiterated. He highlighted Arcano Partners’ capabilities, noting that the firm has been investing in alternative assets for 19 years and serves an international investor base that accounts for 45% of its total managed volume.
In addition to laying out the strong foundations for investment in Europe, the second objective of Hamparzoumián’s presentation was to showcase the alternative asset platform that Arcano Partners has brought to Mexico. “We act as a committed General Partner in our investment programs,” he stated. The firm has offices in San Francisco and New York to serve the U.S. market.
Arcano Partners manages alternative assets through six core strategies: Private Equity, Venture Capital, Sustainable Infrastructure, Credit Strategies, Real Estate, and Aviation Finance. It focuses on direct investments in both primary and secondary markets, as well as co-investments in funds and private companies, with a particular emphasis on sustainability and responsible investing.
The firm’s total assets under management and advisory exceed 12 billion euros since its inception and it leads in alternative asset mandates for tailored clients in Spain. In terms of asset allocation, private equity is the largest segment with 6.2 billion euros.
Arcano Partners also offers Investment Banking and market analysis services through Arcano Research. The firm distinguishes itself through its strong focus on sustainability and responsible investment, positioning itself as a leader in ESG (Environmental, Social, and Governance) investing.