The Algebris Podcast

Financial Credit, Explained: Understanding Bank Capital and AT1s

Financial credit differs from corporate credit because banks operate through layered capital structures, constantly reassessing borrower risk and holding capital against potential losses; Within that structure, AT1s sit just above equity, offering higher yield.European banks are now fundamentally stronger than in past cycles, supported by tighter regulation, stress testing, improved profitability and better asset quality: This has made moving down the capital stack more attractive, particularly in national champion banks where the risk-reward profile may be compelling.The asset class has also matured: a growing share of AT1s now carries at least one investment-grade rating, challenging the perception that they are purely high-yield instruments.For investors seeking real income, European bank AT1s can sit between low-yielding investment grade bonds and more leveraged private credit or high-yield alternatives. In Algebris’ latest podcast, Bruno Duarte (Financial Credit Portfolio Manager), explains how financial credit works, why AT1s matter, and where the opportunities may lie today.

China's Markets Are Back (Davide Serra)

China is advancing at exceptional speed in AI, robotics, biotech, green transition, electric vehicles, and other key innovation sectors. Its cost advantage versus the US is enormous, while performance remains highly competitive. The main drag on the economy has been the long adjustment after the property bubble burst, which has weighed on local consumption. However, over the next two to three years this pressure may normalize, while the “new China” continues to accelerate. At the same time, Chinese equities trade at a significant discount to global markets and offer higher dividend yields. For this reason, China, especially through Hong Kong, is an underappreciated long-term opportunity in global portfolios.Listen to Davide Serra (Founder & CEO, Algebris Investments) in his latest analysis.

War in the Middle East: The market enters a new phase of volatility (Gabriele Foà)

The key variable for markets is the duration of the conflict between the US, Israel and Iran. A short conflict would likely result in only temporary oil price volatility, allowing markets to return to previous levels. However, a prolonged disruption could impact the Gulf region, which represents roughly 20% of global oil supply, potentially creating a physical deficit and triggering stagflation through lower growth and higher inflation. Markets have reacted quickly, but the moves so far remain relatively limited, suggesting further downside risk for risky assets. With investor positioning still very long after a strong two-year rally, the current shock may represent the early phase of a broader period of volatility.

Davos 2026: Key Markets and Macro Implications (Davide Serra)

The central macro message from the 2026 World Economic Forum in Davos is that the US may be moving away from the post-war order, forcing other nations to reinvest in defence and economic resilience.Global growth remains strong, supported by large fiscal deficits, but that also keeps the door open to a resurgence of inflation. AI-led capex is significant and may be outpacing the realistic revenue opportunity by 2030, which could challenge current market pricing. Investors are also leaning further into global diversification, especially given a more unpredictable US policy backdrop and expectations for a weaker dollar.We favour financials on yield-curve dynamics and operational leverage from early AI adoption, and we see gold as increasingly supported by central-bank demand and the search for politically independent reserves.Listen to Davide Serra's notes from the World Economic Forum 2026.

Before buying, let's wait for the sales. (Davide Serra)

Over the last few months the global economy has held up thanks to strong U.S. fiscal stimulus and widespread deficits elsewhere, but for the first time public debt worldwide is around 100% of global GDP, reducing governments’ room to respond to future shocks.Nearly all asset classes look expensive and U.S. rate cuts are already priced in; moreover, Washington appears to be overstimulating the economy, partly with an eye on next year’s midterm elections.There is also exuberance around AI: to justify current valuations, roughly $2 trillion of additional revenues would be needed by 2030—an implausibly large figure compared with the current revenues of the “Magnificent Seven.”This and other takeaways in Davide Serra's (Founder and CEO, Algebris Investments) latest analysis.

The Algebris Bullet | The Elephant in the room

Markets have adapted to a new, less orthodox economic order, supported by expansionary fiscal policies and more accommodative central banks. Artificial intelligence is seen as the main driver of growth, although for now its impact remains more perceived than real.On the geopolitical front, the Middle East appears more stable, while challenges between the United States, Russia and China remain unresolved. In Europe, initial enthusiasm for German fiscal policy has waned, with growth still weak.In the latest Algebris podcast, Gabriele Foà (Global Credit Portfolio Manager) – interviewed by Douglas Branson (Head of Business Development UK) – highlights the fiscal deterioration of advanced countries and predicts an era of “financial repression”, in which government yields will remain close to inflation. In this context, credit offers interesting opportunities, provided a selective approach is taken.(Episode recorded on 29th October 2025)

Positive proof points in an uncertain world

Clean Alpha | Watts it worth: Wired for Growth in the Data Era

A single query on ChatGPT can consume up to 10 times the energy of a traditional search, highlighting the urgent need to address infrastructural and environmental challenges.Datacentres currently account for around 2% of global energy demand, with estimates pointing to further growth. Key issues to be addressed include shortages in the electricity grid, physical space and adequate cooling systems. From energy producers to advanced technology providers: what and where are the investment opportunities in this context?In the new episode of the Algebris podcast, Simone Ragazzi (Global Equity Portfolio Manager), Iacopo Esposito and Antonio Focella (Analysts) from the global equity team explore the topic of datacentres and their growing energy impact, driven by the development of artificial intelligence, interviewed by Douglas Branson (Head of Business Development UK).

Three weeks around the world in five minutes

The United States is facing growing uncertainty due to rising tariffs and a projected $10 trillion in debt issuance, which is pressuring markets and weakening confidence in the dollar. Investors are increasingly hedging as they doubt the administration’s commitment to stable, growth-oriented policies. In contrast, Europe is experiencing a revival, led by Germany's industrial policy shift that is attracting capital, with financials offering compelling value and strong dividends. China is also emerging as an undervalued opportunity, signaling renewed support for the private sector and presenting a strong investment case compared to the U.S. Overvaluation of the dollar and massive Treasury issuance are driving diversification into euros and yen, with a favorable macro backdrop for financial equities and credit.Listen to Davide Serra (Founder and CEO, Algebris Investments) in his latest analysis.

Tariffs Day (Davide Serra)

On 2 April, Trump announced a new set of “reciprocal” tariffs to strengthen the US economy, signalling a significant shift in global economic policy. What happens now?Davide Serra, Founder and CEO of Algebris Investments, explains what tariffs really mean for investors around the world and what to expect from the Fed and the markets in the upcoming months.