#Investments — 17.11.2020

Global Reach, Local Expertise

Since the end of the Cold War, the trend toward ever more international trade and convergence of trade networks seemed to be prevalent and unstoppable. However, over the past few years, the advent of political themes focusing on protectionism and aiming at reducing trade, has taken a more central role on the international scene.

Following the pandemic, many countries have realized that the establishment of international supply chains and concentration of production in a few countries have left them exposed to political goodwill in terms of strategic production like medicine. As a consequence, many countries in the world, especially in Europe, have committed to repatriate some strategic businesses.

This trend can be better understood against the backdrop of the creation of larger trade blocks internationally, negotiating agreements to trade with each other. Recent significant evolutions in international relations like the negotiations between the European Union and the United Kingdom, or the tariffs imposed between China and the USA, have renewed the focus on trade negotiations and the World Trade Organization framework.

While these headlines focus on large trade blocks negotiating with each other, it would be wrong to assume that the exchanges between these large blocks are the only important dynamic to consider when analyzing economic variables and investment opportunities. Within each of these blocks lie multiple local business and political dynamics that need to be understood and taken into consideration. It is definitely not the same to do business in New York versus Texas. Similarly, operating in France versus Germany requires adaptation, despite each country being part of a larger market with similar rules.

This multimodal business environment is one of the hardest elements to assess for an investor. When an investor assesses a possible investment, it is critical to understand global dynamics (like sector dynamics), the ability to enter new markets or overall trade dynamics. It is as important to understand local specificities. Factors like culture, availability of skills for hiring, work regulation, banking rules, tax ecosystem or local incentives, are just as critical to understand the potential upside and the possible risks attached to an investment. What appears at first glance like small differences could have major impact over time on investment returns.

As a private bank with decades of experience across markets, BNP Paribas Wealth Management the largest private bank in the Eurozone - is dedicated to bringing our clients the depth of expertise of one of the largest and most solid banks in the world, as well as strong local presence and knowledge of each market.

Our ethos is predicated on being close to our clients in our core markets with local private bankers able to establish a personal relationship, understand and help our clients in their needs. At the same time, we believe our clients also want to have access to a global network covering the most relevant countries globally.

In that context, our One Bank approach, combining the benefits of our local presence and our global reach, with the strength of our expertise from corporate & institutional banking to financing, and from retail networks to asset management & real estate, helps us to address our clients’ needs and be increasingly relevant in the coming era.

Global banks have the scale to leverage global trends for their clients, but being able to bring scale and local expertise on behalf of clients is what makes a difference, especially in a world where the notions of globalizations and borders are being redefined.