Houlihan Lokey, Lincoln International, Jefferies Financial Group, William Blair and Piper Sandler Cos. rank as the top five most active M&A investment banks in 2019, based on the volume of completed private equity-backed deals in the U.S., according to PitchBook.

Besides advising on M&A deals, the investment banks on the top 10 list also had a busy year with acquisitions of their own in 2019, including two acquisitions by Houlihan Lokey and three by Stifel Financial. Piper Sandler Cos., was created when Minneapolis-based Piper Jaffray Cos. acquired New York-based Sandler ONeill & Partners in a deal representing more than half of Piper Jaffrays million market capitalization. The firm also had another acquisition in 2019 and sold a company to exit the traditional asset management business.

Here are Mergers & Acquisitions profiles of the 10 firms that led the league tables in a robust year for dealmaking.

Editors Note: This story is a collaboration between Mergers & Acquisitions and PitchBook. The profiles are reported and written by Mergers & Acquisitions, and the deal count and ranking data comes from PitchBook. We use the data available at press time. This story was compiled based on the data available on Feb. 14, 2020.

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Top investment banks for PE-backed deals in 2019: Houlihan Lokey led the pack - Mergers & Acquisitions

(BLOOMINGTON) Mayor John Hamilton and the Bloomington Common Council invite community members to participate in a discussion of a Sustainability Investment Fund and the local income tax that would support it. The interactive public event convening local sustainability leaders, City department heads, and council members takes place Thursday, March 5 from 7 to 9 p.m. at The Mill (642 North Madison Street).

This is the first of many chances for residents to share ideas and concerns about a fund supporting the sustainable and equitable development of our community as it confronts climate change. After a brief introductory presentation, those attending will be encouraged to rotate among a number of stations to engage with subject-matter experts. Stations will be dedicated to such topics as the Citys comprehensive response to climate change, how the fund might support social equity, and the possibilities the fund could create in areas from transit and other mobility options to sustainable housing and green infrastructure, among others.

A light meal will be provided, and reservations are not required to attend this free event. A video recording of the presentation will be available on the citys website and on CATS after the event, and residents may also share comments and suggestions about the Sustainability Investment Fund at this online form.

The investments we make and the actions we take during this decade to protect our environment and the well-being of our people are critical, as our residents have also repeatedly told us, said Mayor John Hamilton. This fund will help our community be resilient in the face of unprecedented changes, and enhance the quality of life for everyone who wants to live here.

Proposed by Mayor Hamilton January 1 and elaborated upon in his February 20 State of the City address, the fund would provide means to foster equitable and sustainable economic development as the community confronts the local effects of climate change. Over the next decade, a proposed 0.5% increase in the local income tax for Monroe County residents would raise approximately $160 million (of which City and County government would each receive approximately $80 million) for sustainable economic development. In order to be adopted, the tax must be passed by the Local Income Tax Council, which comprises the Bloomington Common Council, the Monroe County Council, and the Stinesville and Ellettsville Town Councils.

We can approach this climate challenge as an opportunity for positive transformation, investing in a more inclusive and sustainable future,said Common Council member Matt Flaherty. I believe we can do whats right for the planet and for future generations while also better meeting the needs of our residents today.

This event will kick off a series of public engagement and input sessions about the Sustainability Investment Fund, the schedule of which will be posted at a dedicated page on the Citys website.

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Meeting at the Mill: A Conversation About a Sustainability Investment Fund - WBIW.com

As the exchange traded fund industry grows and attracts greater attention, institutional investors have played a big part in the quick expansion in the ETF universe.

The evolution of the institutional usage of ETFs has been fun to see, Brian ODonnell, SVP, Head of Business Strategy, Northern Trust Asset Management, said at the Inside ETFs conference. Institutional investors are always looking for low-cost, beta ETFs, as you can imagine for things like transition management, securities, in lieu of futures a lot of things weve been seeing for a long time.

ODonnell also pointed to growing demand for targeted market plays or precise themes that ETFs may provide easy access to, such as real assets.

For example,infrastructure ETFs, such as the FlexShares STOXX Global Broad Infrastructure Index Fund (NYSEArca: NFRA), offer investors sound fundamentals and above-average dividend yields, making the asset class appealing in the current market environment. NFRA tries to reflect the performance of the STOXX Global Broad Infrastructure Index, which identifies equities that derive the majority of revenue from infrastructure business, providing exposure to not only infrastructure sectors, but non-traditional ones as well.

The FlexShares Morningstar Global Upstream Natural Resource Index Fund (NYSEArca: GUNR) provides exposure to the rising demand for natural resources and tracks global companies in the energy, metals and agriculture sectors while maintaining a core exposure to the timberlands and water resources sectors, is a part of the risk management theme. GUNR specifically identifies upstream natural resources equities based on a Morningstar industry classification system, with a balanced exposure to three traditional natural resource sectors, including agriculture, energy, and metals.

Lastly, the FlexShares Global Quality Real Estate Index Fund (NYSEArca: GQRE) targets the Northern Trust Global Quality Real Estate Index, a fundamentally-weighted index that focuses on commercial and residential REITs. Mortgage REITs, real estate finance companies, mortgage brokers and bankers, commercial and residential real estate brokers, and real estate agents and home builders are among the securities excluded from the index. GQRE also features significant ex-US exposure, a trait that should serve the fund as a slew of central banks besides the Federal Reserve consider lowering interest rates. While REITs are trading at the higher end of historical valuation ranges, the group is generating robust cash to support dividend hikes.

For more ETF-related commentary from Tom Lydon and other industry experts, visit ourvideo category.

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ETF Themes That Have Attracted Institutional Investment Interest - ETF Trends

CNBC's Jim Cramer gave a preview of what's on his earnings calendar next week. The "Mad Money" host offered more stock picks for this volatile market environment. Later in the show, he sat down with Hannon Armstrong CEO Jeff Eckel to talk environmentally conscious investing.

CNBC's said Friday that the stock market remains in a feeble position, the bond market is flashing a warning sign and the investment community should be prepared for more coronavirus uncertainty.

The , now in correction territory, fell more than 1,000 in intraday trading before staging a late rally to close Friday's session down 357 points, or 1.39%. The 30-stock index dropped a total of 3,938.67 points in the past five trading days, capping off the worst week on Wall Street since the 2008 financial crisis.

Money managers unloaded their stock portfolios and put their funds in safe-haven instruments such as bonds, causing interest rates to fall near record lows. The benchmark U.S. 10-year Treasury yield bond yields move inversely to prices was last at 1.16%.

"In other words, the bond market's screaming that the coronavirus is far worse than most people realize, global commerce will take a real hit and it might even be something similar to 2008 when all hell broke loose," the "Mad Money" host said. "I can't tell you whether the bond market's right. I'm not an epidemiologist, but I know the markets."

Cramer gave a preview of the corporate earnings and economic news that's circled on his calendar next week.

"Get ready for another rough day on Monday because I expect more COVID-19 shoes to drop this weekend," Cramer said. "You've got to be ready for a snapback [rally], though, if we keep getting so negative."

Wall Street is in deep correction territory, stocks have been discounted and the embargo on putting money in securities is now over after a tough week of trading shrouded in coronavirus uncertainty, Cramer said.

"We've had back-to-back days, though, where 10 times as many stocks were falling versus going up, and that is highly unusual," the host explained. "It suggests we're getting closer to a bottom ... though we probably may not be there yet."

Jeff Eckel, CEO of Hannon Armstrong.

Adam Jeffery | CNBC

Wall Street's attitude toward climate change has seemed to shift in recent months, but it is far from showing it's truly serious about sustainable investing, CEO Jeffrey Eckel told Cramer.

Eckel, whose firm focuses exclusively on investing in climate change solutions, said there are three things the Street can do to solidify its green credentials and usher in a "fundamental reshaping of finance."

The first, Eckel said on "Mad Money," is that Wall Street banks and asset managers have to ask, "Is this investment accelerating climate change or slowing it?"

The second is about transparency, Eckel said. He said firms need to disclose every one of their investments. "Not just the investment but the carbon impact," he said.

Finally, he said every investment should be calculated using a metric called "CarbonCount," a tool his company developed.

"If carbon counts and capital is scarce, we should be making the most impactful investments, and the way to do that is to measure our carbon count for every investment," Eckel argued.

In Cramer's lightning round, the "Mad Money" host delivered his thoughts on callers' favorite stock picks of the day in rapid speed.

: "Bad quarter, [I] like the company though and as it's come down I think it's a buy. I was surprised how weak the quarter was, though."

: "Cybersecurity. I like. 's a little better, but I think you've got a good one there."

Questions for Cramer? Call Cramer: 1-800-743-CNBC

Want to take a deep dive into Cramer's world? Hit him up! Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

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Everything Jim Cramer said about the stock market on 'Mad Money,' including market calendar, close to bottom, green investing - CNBC

In emerging markets, up to 80% of the population may have to rely on informally-run public transport to get around. Literally, privately-run buses and cars. But journey-planning apps that work well for commuters in developed markets like New York or London do not work well in emerging markets, which is why you cant just flip open an app like Citymapper in Lagos, Nigeria. Furthermore, mobility is a fundamental driver of social, political, and economic growth. If you cannot get around, you cant grow as a country, so its pretty important for these emerging economies.

WhereIsMyTransport specialises in mapping these formal and informal public transport networks in emerging markets. They have mapped 34 cities in Africa and are mapping cities in India, Southeast Asia and Latin America. Its integrated mobility API includes proprietary algorithms, features and capabilities designed for complex transit networks in these emerging markets.

Its now raised a $7.5 million Series A funding round led by Liil Ventures, that also includes returning investors Global Innovation Fund and Goodwell Investments, plus new strategic investment from Google, Nedbank, and Toyota Tsusho Corporation (TTC).

The platform now has more than 750,000 km of routes in 39 cities and the new strategic investment will drive further international expansion.

Devin de Vries, said: We make the invisible visible, by collecting all kinds of data related to public transport and turning the data into information that can be shared with the people who need it most. In emerging markets, the mobility ecosystem is complex; informal public transport doesnt behave like formal public transport. Data and technology solutions that work well in London or San Francisco wouldnt make anything like the same impact, if any at all, in the cities where we work. Our solutions are designed specifically to overcome these contextual challenges.

Mr. Masato Yamanami, Automotive Divisions CEO of Toyota Tsusho Corporation, also said that our divisions global network, that covers 146 countries, is primarily focused on new emerging countries where people rely on informal public transport. Through strategic collaboration with WhereIsMyTransport, we will establish better and more efficient mobility services that help to resolve social challenges and contribute to the overall economic development of nations, primarily emerging nations.

Finally, Alix Peterson Zwane, Chief Executive Officer of Global Innovation Fund, said: Informal and often unreliable mass transit is a significant problem that disproportionately affects poor people. We are excited to continue to work with WhereIsMyTransport to make mass transportation in emerging cities more accessible and more efficient.

Read more:
Google, Toyota invest in WhereIsMyTransport to map transport in emerging cities - TechCrunch

Recent financial headlines have been consumed with the coronavirus, which after originating in China has since spread to other countries rapidly, advancing into South Korea, Italy and Iran before making its way to other parts of the world, including the U.S. In all, the number of infections has topped 83,000, while the death toll is approaching 3,000, according to the most recent estimates.

Its hard to know for sure what type of long-term risk this will present to the market. Whats clear now, however, is that investors are spooked. That has prompted the worst week for equities since the financial crisis, punctuated by Thursdays nearly 1,200-point dive, which has the indexes squarely in correction territory.

Make no mistake, this will pose a serious test to many countries healthcare systems and economies. At the same time, markets are resilient, always bouncing back from big challenges, whether its the bursting of the dot-com bubble or other health crises like SARS.

This time around, the same will likely hold true. Despite this weeks carnage, U.S. markets are still up since the end of May, while the broader economy remains strong, with last months job and wage growth numbers exceeding expectations.

Of course, a global supply chain disruption that lingers for months could result in a meaningful downtick in corporate earnings. Apple, for one, has warned that the coronavirus will hamper iPhone production and sales.

A long line of other large firms have issued similar warnings, including United Airlines, Microsoft and Mastercard. Apart from Clorox, in fact, its hard to think of a company that has not been impacted negatively. By year-end, however, its reasonable to expect that supply lines and demand for goods will return to normal.

Another reason to remain somewhat optimistic is that the Federal Reserve and other central banks around the world will likely do all they can to prop up local businesses and prevent short-term consumption reductions from spiraling out of control. That means already low interest rates will go even lower, boosting the case for equities over the long term.

BUYING OPPORTUNITIES

All this presents an opportunity for investors. Airlines, theme parks, movies and cruise lines whose businesses rely on large groups of people coming in close proximity to each other are among the worst hit. (Cruise line revenues might have quite some time to wait before rising again, since travelers often have to book their tickets months in advance).

But big companies in these industries that were stable before the coronavirus outbreak will stay in operation after all the dust settles. So, for investors, this is a chance to pounce, especially when many of these firms are trading at a sizable discount.

Airlines such as Delta, theme park operators and movie producers like Disney, or even cruise ship companies such as Royal Caribbean are unlikely to suffer for long. The same is true for major, state-favored Chinese firms, such as Alibaba or Baidu.

X-FACTORS

What could go wrong with this scenario? A lot. The biggest risk is that consumption across major economies begins to evaporate, which could inflict major damage on a long line of small and mid-sized businesses, possibly causing them to fold and triggering localized recessions across the globe.

Similarly, a serious domestic coronavirus outbreak would significantly expand the timeline for downside risk. Luckily, though, the U.S. is far more prepared to contend with the fallout, not only because the element of surprise is gone, but also thanks to the quality of its medical facilities and emergency response capabilities.

Its certainly conceivable that even the gloomiest of forecasts could come true. Nevertheless, markets and hard-hit sectors will recover. They always do.

After all, major stock price slides are relatively common over the long-term, with markets averaging about three 5% pull backs per year since 1950. For more historical perspective, consider that the S&P shed 5.5% over an eight-day stretch in the wake of the SARS outbreak during March 2003. A year later, it was up more than 35%.

The markets will always face challenges. Without discounting the devastation that the coronavirus has heaped on thousands of families, this is simply the latest one and we will be all right when its over. So, its time to take advantage of this recent tumble in prices as an opportunity to get aggressive.

See more here:
Invest Like The Markets Will Overcome The Coronavirus, Because They Will - Forbes

Keeping calm when markets crash is easier said than done. It is human nature to be fearful when things look bad and the outlook suddenly becomes bleak. Today, Mr. Market (as Benjamin Graham puts it) is testing the patience and courage of investors once again. The Dow declined more than 1,000 points twice this week, making it difficult for investors to keep a clear head.

Source: CNBC.

American stocks have declined for seven consecutive days, and according to Bloomberg data, February 2020 is on its way to becoming the worst month since December 2018.

Source: Bloomberg.

Both the Dow and the S&P 500 Index were down over 10.5% as of Thursday, making this week the worst since the days of the financial crisis.

If ever there was a need to reiterate the importance of staying invested in equity markets, it's now. Investors need reassurance that things will return to their normal state soon, but right now, there's panic.

SunTrust Chief Market Strategist Keith Lerner told Bloomberg on Friday:

"Investors are selling stocks first and asking questions later. We are seeing signs of pure liquidation. 'Get me out at any cost' seems to be the prevailing mood. There is little doubt the coronavirus will continue to weigh on the global economy, and the U.S. will not be immune. There is much we do not know. However, it is also premature to suggest the base case for the U.S. economy is recession."

While that might provide some relief to investors in the sense that a renowned market commentator does not believe a recession is in the cards, investors need something more concrete than that to remain bold and go against the grain.

For 120 years, there has been one clear winner

Credit Suisse Research Institute released an important set of market data spanning 120 years, confirming that none of the popular asset classes could match the returns provided by equity markets. The report, prepared in collaboration with professors from London Business School and Cambridge University, revealed the following performance statistics.

Asset class

Annualized real return between 1900 and 2020

Equities

5.2%

Bonds

2%

Treasury bills

0.8%

The significant outperformance of equity markets reveals one thing: the risk-reward factor is always at play and as an economy grows, so will the stock markets. The ride is not always smooth, however, and there will be speedbumps along the way.

Trying to time the markets is a costly mistake, as Warren Buffet told CNBC earlier this week:

"There have been seven Republican Presidents after that (since buying his first stock at the age of 11) and seven Democratic Presidents and I have bought stocks under every one of them. I haven't bought stocks every day, there have been a few times I felt stocks were really quite high, but that is very seldom."

Further elaborating on his investment career, the guru said that he has bought stocks each year since making his first investment at a very young age. This highlights one important action that could deliver long-term success to investors; buy stocks when they are seemingly cheap, regardless of the macroeconomic or geopolitical outlook for America in the coming years. The country has survived many recessions, epidemics, property market bubbles and two World Wars. None of this could materially impact the long-term performance of stocks, however. Right when it looked as if things would never recover, American markets surprised investors.

Changes in investor sentiment could result in significant volatility in stock prices. However, none of this would likely matter in the long term as much as staying invested does. Numbers don't lie, at least not as much as sentiment and gut feelings do.

Story continues

One more reason to stay calm

Even though many investors might not be aware of this, missing just a few market days could completely erode the profitability of a portfolio. As surprising as this might sound, empirical evidence proves it. In 2019, JPMorgan Asset Management conducted a market performance review to evaluate this phenomena, using data from Jan. 1, 1999 to Dec. 31, 2018.

Source: JPMorgan.

Liquidating a portfolio and waiting for a better time to get in is a common strategy used by fearful investors. However, if such an investor failed to time the markets, which is almost a certainty, and missed just 20 days that ironically happened to be the best days of the market, he would have ended up losing money even though the market performance was positive in this period. What is even more interesting is that investors can never know with any degree of certainty when a bear market will turn bullish.

There's only one way to avoid making this mistake: to remain invested even when markets are crashing. Even though the rational decision might seem to be turning stocks to cash and parking in an interest-bearing account, the numbers prove this is a costly mistake. If, however, an investor had a mechanism to predict the best 10, 20 and 30 days of the market in advance, it would be best to liquidate and wait for such sunny times. But not even institutional investors have been able to decipher such a way to do this, even with the massive advance in quantitative analysis techniques.

Takeaway: Be patient

There's enough data to suggest that trusting U.S. markets even when they are crashing is the right decision. The best way to do this during trying times is to avoid constantly checking stock prices and the value of an investment portfolio as the mostly red numbers might prompt investors to act irrationally. Staying calm and patient is the key, and the market will do its magic as time passes by.

It seems appropriate to end this analysis with something Buffett told CNBC in 2016.

"If you had a chance to buy into a good company in your hometown...and you knew it was a good company and knew good people were running it, and you bought in at a fair price, you wouldn't want to get a quote every day."

Disclosure: I do not own any stocks mentioned in this article.

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A Good Reason Why You Should Stay Invested Despite the Bloodbath - Yahoo Finance

Over the past several decades, the cost of college has steadily climbed, causing a student debt crisis and creating a climate of skepticism about the true value of a college degree.

A recent Gallup poll of more than 2,000 American adults reveals that roughly half of Americans don't see college as a necessity.

But according to a new survey from college planning website BestColleges of 817 American adults who have actually earned a bachelor's degree, 82% say their degree was a "good financial investment."

Still, 61% of those surveyed said they would change one thing their major.

Those who said their degree was worth the investment are likely correct.

According to The College Board, the average student debt total among those who take out loans to pay for college is roughly $29,000.

However, the Georgetown University Center on Education and the Workforce estimates that a bachelor's degree is worth $2.8 million over a lifetime, on average

Indeed, there is still reason to believe in the conventional wisdom that a college degree can be a clear path to stronger job opportunities and higher earnings.

In 2018, college graduates earned weekly wages that were 80% higher than those of high school graduates, according to the Federal Reserve. The Bureau of Labor Statistics reports that Americans with a bachelor's degree have median weekly earnings of $1,173, compared to just $712 a week for those who have a high school diploma.

While hard skills can help college graduates reach these higher earnings, respondents said that learning soft skills was actually the most valuable part of their college experience. Over 40% of those polled felt that mastering soft skills like creativity, critical thinking and communication was the most beneficial.

Less than 6% of graduates said that their alma mater's reputation was the most valuable part of college.

"It isn't about name recognition. It isn't prestige. It's literally the skills and their experiences that are helping people every day in their jobs," Quinn Tomlin, public relations manager for BestColleges tells CNBC Make It.

In fact, when LinkedIn analyzed hundreds of thousands of job postings, they found that the most in-demand skill that employers were looking for was creativity.

Around 61% of those polled by BestColleges said they would go back and change their major if they could.

"People are going back and realizing that maybe the major that they studied is not actually aligning with the outcomes that they want in their life," explains Tomlin.

Around 26% of degree holders said they would change majors to pursue their passions, and 25% said they would change majors for better job opportunities.

Tomlin recommends that students who are unsure about what they are passionate about take a gap year to explore their options or to begin their college career at a community college so that they can try out different classes at a lower cost.

"Take the time to really get your foundation down and explore what you're interested in at a fraction of the cost," she says. "Then transfer to a university when you're really ready."

Students should also consider their financial realities after college. There is a wide range in how much graduates earn based on what they study and what fields they pursue careers in.

"Choosing a major might seem like no big deal, but it's one of the few choices you make as a 19- or 20-year-old that can have an outsized impact on your entire career and possibly your whole life," Chris Kolmar, co-founder of career planning site Zippia, previously told CNBC Make It. "When you're selecting a college major, you should consider how that choice will set you up for your career. If you're looking to snag a high-paying job out of college, you should ideally look for a subject you're passionate about, but that there's also a market for on the hiring front."

One tool at students' disposal is the College Scorecard, which allows them to see the median earnings and median debt of a school's graduates, based on their chosen field of study.

Science, technology, engineering and mathematics fields typically dominate lists of the highest-earning college majors and most in-demand jobs.

Check out: The best credit cards of 2020 could earn you over $1,000 in 5 years

Don't miss:

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82% of college grads believe their bachelor's degree was a good investmentbut most would make this one change - CNBC

Assemblyman Marc Levine, D-Marin County, has introduced Assembly Bill 3258, which would require property insurance providers to take into consideration local government investments in wildfire prevention when determining insurance rates.

California Insurance Commissioner Ricardo Lara and a group of Legislators earlier this month introduced Assembly Bill 2367, which is being called Renew California. That bill would require admitted insurance companies to write or renew policies for existing homes in communities that meet a new statewide standard for fire-hardening. The bill also would authorize the insurance commissioner to require insurance companies to offer financial incentives for homeowners to do the work to make their homes more fire-safe.

Devastating wildfires throughout California over the past several years have forced local governments to rethink their role in reducing future wildfire risk. Marin and Sonoma County voters are being asked on the March 3 ballot to make a specific investment to prevent wildfires in their communities.

The proposed Measure C in Marin County would levy a parcel tax on commercial and residential parcels to raise approximately $19.3 million per year solely for wildfire prevention programs. The proposed Measure G in Sonoma County is a half-cent countywide sales tax which, if passed, would generate about $51 million a year for county fire agencies to increase preparedness and better combat the ongoing threat of devastating wildfire.

Under Levines AB 3258, property owners in areas that have adopted dedicated local fire prevention programs would be able to renew a property insurance policy in a historically high-risk area or potential modifications to property insurance premiums.

AB 3258 will be considered by the State Assembly this spring.

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California Bill Aimed at Property Insurance in Communities Investing in Wildfire Prevention - Insurance Journal

Mexico is an emerging market, but it's rarely mentioned in the same breath as higher-growth countries like China or India. The country's GDP growth decelerated over the past five years, and it's still struggling withpoverty, crime, and corruption.

Yet there are flickers of hope on the horizon. The trade war between the U.S. and China caused some companies to move their manufacturing plants to Mexico to avoid tariffs. Mexico's poverty rates arealso gradually receding, and its per capita income rose from $5,481 to $9,673 between 1998 and 2018.

That's why it wasn't surprising when Microsoft (NASDAQ:MSFT) recently announced that it would invest $1.1 billion in Mexico over the next five years. In a video released by the Mexican government, CEO Satya Nadella stated that Microsoft would build a new data center in Mexico and invest in new training labs and programs across the country.

Image source: Getty Images.

Nadella, who met with Mexican president Andres Manuel Lopez Obrador last year, stated that the investment would expand "access to digital technology for people and organizations across the country." Let's dig deeper to see what Microsoft's investment tells us about its future plans for Latin America.

Microsoft generated 51% of its revenue fromthe United States in fiscal 2019. The rest came from "other countries," but Microsoft doesn't break down its international sales by individual countries or regions. However, it noted that no country outside of the United States generated more than 10% of its revenue.

Mexico is the15th-largest economy in the world, so it probably only accounts for a low single-digit percentage of Microsoft's annual revenue. Nonetheless, planting roots in Mexico could still benefit Microsoft in several ways.

Image source: Getty Images.

First, it will expand the global presence of its cloud platform Azure, which isavailable in 56 regions and 140 countries worldwide. The majority of its data centers are concentrated in the U.S., Europe, Asia, and the Middle East. It only operates two data centers in Africa, and its single center in Latin America is located in Brazil.

Building a new data center in Mexico would significantly boost Azure's capacity in Latin America. Azure -- whichgenerated 62% annual revenue growth last quarter -- is the core growth engine of Microsoft's commercial cloud unit, which grew its revenue 39% to $12.5 billion (34% of its top line) last quarter.

Microsoft could tether more Mexican businesses to Azure, which would widen its moat against its larger rival Amazon (NASDAQ:AMZN) Web Services (AWS). AWS currently offers three availability zones, all based in Brazil, for Latin America.

Microsoft could also bundle other commercial cloud services (like Office 365 and Dynamics 365) with Azure. Some of Azure's topcustomers, including Walmart (NYSE:WMT), also operate in Mexico -- so a regional data center could tighten Microsoft's grip on Walmart's Mexican businesses. Microsoft's investments in training labs could also produce skilled Mexican workers who could run its regional operations for lower wages than workers in other countries.

Microsoft's investment in Mexico is considered a rare victory for President Lopez Obrador's left-wing administration, which waspreviously criticized for implementing rigid business regulations that stifled local and foreign investments. Neither Microsoft nor the Mexican government revealed the exact terms of the deal, but the tech giant could be receiving tax breaks or other benefits for setting up shop in Mexico.

$1.1 billion over a period of five years -- or $220 million a year -- is pocket change for Microsoft, which isexpected to generate $142 billion in revenue this year. In short, it's a small price to pay to boost Azure's presence in Latin America, widen its moat against Amazon, and gain a firm foothold in an oft-overlooked emerging market.

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Microsoft Is Investing Over $1 Billion in This Unloved Emerging Market - The Motley Fool