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Digitalisation and artificial intelligence, renewable energies, energy security and population aging are the top-scoring investment trends in terms of importance now and over the next three decades, according to a survey.
Annual survey “What’s Next? Future Investing Trends”, conducted by Investcorp in partnership with IMD Business School.
Results showed slightly different results between senior/older and junior/younger respondents, with more senior investors citing digitalization and artificial intelligence, renewable energy and energy security as top priorities, while more junior investors Those who regard digitalization and artificial intelligence, energy security and aging as the most important demographics are the most important.
Trend
Among those surveyed, the top 5 trends identified were digitalization and artificial intelligence; renewable energy; energy security; aging population and electric vehicles and battery storage
The survey once again identified digitization and artificial intelligence as the dominant megatrend that investors see as the number one trend across all regions surveyed (Europe, Middle East and the US). More than eight out of ten major global institutional investors say they are currently investing or will invest in this space. Global investors are convinced that digitization and artificial intelligence will enable companies to provide solutions to pervasive problems and will unleash a wave of innovation in the coming years.
energy security
Not surprisingly, the data identified energy security as a key theme in both Europe and the United States – a theme both driven and exacerbated by the current conflict between Russia and Ukraine. The conflict has dramatically boosted energy and commodity prices, exacerbated post-Covid-19 supply-side shocks, caused additional disruption to supply chains and contributed to a surge in inflation, all of which were most strongly felt in European and US markets.
Investing in domestic energy production to strengthen and ensure their own energy security has become a top priority for Western markets. Survey data suggests that investors expect the theme of energy security to persist beyond the end of the current conflict and believe this will present opportunities to invest in domestic energy production in Europe and beyond.
Aging population
Investors are more divided across regions on other megatrends shaping our world. For example, many European and Asian investors (likely driven by Japanese and Chinese investors) are concerned about the trend of aging populations, while the US and the Middle East are less concerned due to their younger populations. Investing in the healthcare industry is one of the more obvious investment opportunities to participate in this long-term trend.
The Nuances Between Net Zero/Decarbonization and Renewables
The survey highlights how the topics of net zero/decarbonization and renewable energy do not have a consensus regional perspective. For the US and Europe, survey data indicate that net zero/decarbonization and renewable energy are considered the key investment trends determining the next 30 years. However, the data suggest a disconnect between renewables and net-zero emissions/decarbonization in Asia and the Middle East. Looking back at the recent COP27 meeting, it is clear that there are strong regional views and opinions when it comes to net zero/decarbonization and how quickly different regions should decarbonize. In contrast, attitudes toward renewable energy are different given the large investments in large-scale renewable energy projects underway in Asia and the Middle East. The findings account for differing economic considerations and energy reliance on fossil fuels across regions, however, decarbonization opportunities clearly exist in Asia and the Middle East, as these countries face some of the greatest carbon emissions challenges.
Is the generation gap around sustainability narrowing?
Past narratives have focused on how younger generations of investors are more concerned with sustainability and the future of the planet when making investment decisions than are veteran investment professionals. Notably, survey data suggest this is no longer the case.
While previously it might have been easy to point to a generation gap on sustainability-related issues, the reality is that a much larger percentage of the investing population is actually aligned on these issues, and arguably, the findings suggest that decarbonization and now, Renewable energy is more important to older investors than younger ones, and topics such as workplace and workforce shifts are becoming trends of interest to this demographic.
Rishi Kapoor, Co-CEO of Investcorp, said: “Capital flows and demand, market and industry forecasts, and the regulatory environment are all key when considering future investment themes. Our recent survey provides a good insight into how investments are being made globally Researchers are evaluating and weighing different global megatrends shaping the world market.
hope and opportunity
“It’s clear to global investors that digitalization and artificial intelligence are key trends shaping the global economic landscape in the long term, and our data suggests that companies that use cutting-edge technologies to solve pervasive or critical problems will achieve the same high level of success as they have seen in recent years. Like last year, investments can be made for decades to come. Although the industry has had a very difficult year, it remains an attractive area to invest in today, with investors surveyed believing the industry will weather the current crisis A macroeconomic storm. This provides some hope and opportunity for growth capital and investors who invest primarily in technology.”
Hazem Ben-Gacem, Co-CEO of Investcorp added: “The megatrends identified in our recent survey reflect the current and future investment priorities of some of the world’s most knowledgeable and insightful global investors. A breakdown of the trends shows that investment Investors are keenly aware of the way megatrends may impact their portfolios and are prepared to mitigate threats and seize opportunities that arise across a range of factors.In terms of renewable energy and decarbonisation, we are confident in this space as we Seeing increasing demand and supply issues in the market, huge potential for innovation and a favorable regulatory backdrop.”
The survey polled global institutional investors, ranging from pension funds to family offices, for their views and allocations on the most pressing long-term trends expected to shape the global economy over the next three decades. The survey paints a picture of the broader demographic, resource, technological, environmental and geopolitical factors driving the global economy and what this means for current and future investment opportunities. — trade arab news agency
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