Editorial

In the January 2025 edition of our newsletter, we spoke of the resilience of the global economy, driven by US growth but also vulnerable to whatever measures might be decided by the Trump administration.

The way events have since unfolded has largely confirmed our fears: in the wake of the measures announced by Trump on 2 April 2025, the risk of vulnerability materialised with unprecedented magnitude.

By overestimating the positive effects on the US economy of a sharp rise in custom duties, while underestimating the impacts of supply chain disruptions, stagflation risks and China’s response (China having readied itself since Trump's first term in office), the US President sapped the strength from the US economy, the US dollar and, above all, investor confidence in the country’s colossal debt.

Bear in mind that US national debt currently stands at around $35,000 billion (i.e. 123% of Gross Domestic Product (GDP)), with just under 30% of said debt held by foreign investors, including European countries (combined), China, Japan and others such as Canada. Interest payments on this debt now exceed the amount of the Defence budget.

Trump’s sudden about-face, when on 9 April he announced a 90-day pause on tariffs, can certainly be traced to the equally sudden 60 to 70 bp hike in US 10-year and 30-year treasury yields in less than 2 days (a historic first!). Perhaps the Trump administration felt the icy wind of momentary panic.

Marc-Antoine Collard offers us his analysis of the situation, underscored by strong volatility spanning the entire financial and economic spectrum, coupled with multiple resulting uncertainties, not to mention the Fed’s dilemma in addressing increased stagflation risk. It will probably take several months for things to quiet down.

This major paradigm shift perfectly illustrates the intricate ties between political decisions, economic dynamics and financial markets. This is nothing new in and of itself, however the scope is unprecedented.

Xavier de Laforcade shares his analysis of this interdependence, and most notably the impact of political decisions on certain investment themes, in listed and unlisted instruments alike.

Above and beyond macroeconomic dynamics, some sectors have set themselves apart for their resilience and long-term growth potential. One good example is Healthcare in the unlisted investment space. While this investment theme offers lasting growth over time, it is by no means a monolith. There are multiple distinctions to be made, meaning it is important to identify segments that are not only the most attractive, but also the least speculative and least volatile.

We also asked Claire Zarouk, Senior Associate at GHO Capital, Pierre Moustial, Chairman and Co-Founder of Lauxera Capital Partners, and Elena Coluccelli Guerin, Partner and Co-Head – Healthcare France at Rothschild & Co Global Advisory, to offer their perspective on these issues and to share their key investment views along with their vision of the complementarity between listed and unlisted investments.

In another field tied to the expertise of our wealth management teams, Grégoire Salignon reviews governance best practices for family-owned companies and the various options in terms of ownership structures: public limited companies (société anonyme or SA), limited-liability companies (société à responsabilité limitée or SARL), limited joint-stock companies (société par actions simplifiée or SAS) and private limited companies (société civile or SC). The choice of one structure over another depends, of course, on the wealth management and entrepreneurial objectives of the company heads and their families.

Enacted on 14 February 2025, the French Finance Act introduced several new measures. Joël Contreras, Head of our Wealth Management Department, gives us his analysis, which you can find in detail on our website.

As you know, all of our teams are run collectively and with goodwill, underpinned by the constant drive to improve our services and grow the assets entrusted by our current and future clients.

In a bid to ramp up our business development, we are pleased to announce the opening of Rothschild & Co Wealth Management in Luxembourg, in addition to our new office in Nantes with the aim of expanding our operations in the Grand Ouest region of France.

We may very well have yet another initiative to announce over the course of the year.

Thanks for reading,

Alain Massiera