At the Global Financial Leaders’ Investment Summit in Hong Kong, Marc Rowan, Apollo Global Management’s CEO, mentioned an “industrial rebirth” in the United States that is triggering a surge in the demand for capital. He described the current situation as “nothing short of extraordinary,” a sentiment expressed during a panel discussion on Tuesday.
The rising demand for capital has been bolstered by significant government spending on infrastructure, the semiconductor industry, and initiatives under the Inflation Reduction Act. The asset manager, who is allegedly being considered for the role of Treasury Secretary under President-elect Donald Trump, said that this demand is occurring against a backdrop of substantial US government deficits. This suggests that the business of raising capital could prove profitable, he added.
The US has been the primary destination for foreign direct investment for the last three years, according to Rowan. Additionally, he anticipates that the country will continue to hold this position throughout the year. He, along with other panelists, pointed to sectors such as energy and data centers — crucial for digital transformation and artificial intelligence — as areas requiring more capital.
Jonathan Gray, Blackstone’s President and COO, emphasized the importance of data centers, which he said represent the largest theme across his firm. Blackstone is heavily investing in their development, indicating a strong belief in the significance of digital infrastructure.
The summit, hosted by the Hong Kong Monetary Authority, also revealed optimism about capital raising’s recovery from a recent downturn. Goldman Sachs’ chairman and CEO, David Solomon, noted that capital raising activity had hit its peak in 2020 and 2021, buoyed by a significant Covid-era stimulus. However, it later slowed due to the Ukraine war, inflation, and stricter Federal Trade Commission regulation.
There has been a resurgence in activity as conditions return to normal, and Solomon anticipates a more favorable regulatory environment under the incoming Trump administration. While acknowledging the inflationary backdrop and other risks, Ted Pick, CEO of Morgan Stanley, emphasized the overall health of the consumer and corporate sectors as the economy continues to expand.
The current environment has been beneficial for those engaged in capital allocation, Pick noted, adding that Morgan Stanley is now preparing to move into “capital raising mode.” He referred to this as a hallmark of a thriving economy, paving the way for more vigorous capital raising and merger and acquisition activities in 2025.
