At last week’s Market Group Congress in Amsterdam, we participated in a panel alongside ING, Franklin Templeton, HarbourVest Partners, and Providence Capital. The discussion focused on navigating a changing credit cycle amid ongoing policy uncertainty.
Key takeaways:
• Real estate: Industrial assets remain favored, with yield shifts absorbed and stable income growth restoring positive total returns after several quarters of decline. Inflation hedges need to adapt to low single-digit territories.
• Life sciences real estate: Opportunities are concentrated around universities, pharmaceutical production sites, and regions with deep labor pools, rather than low-energy residential assets.
• Venture capital: Appetite is resurging, especially from US flows into Europe. Building bridges between corporates, private investors, and research hubs is seen as critical to accelerate innovation from lab to market.
• Infrastructure: Demonstrates resilience, with EBITDA growth weakly linked to inflation (0.3) and GDP (0.2), indicating favorable conditions amid moderate inflation and positive growth.
• Energy: Regulatory resets and downstream distribution dynamics are creating valuation tailwinds. Grid investments could deliver up to 25 times the impact compared to energy efficiency in high-emission countries.
The overarching message: Allocation decisions are crucial, but the main challenge is deliberate preparation for the next market cycle, emphasizing strategic positioning and proactive risk management.