Jonathan Gray, president and chief operating officer of Blackstone Inc., from left, Ron O'Hanley, chief executive officer of State Street Corp., Ted Pick, chief executive officer of Morgan Stanley, Marc Rowan, chief executive officer of Apollo Global Management LLC and David Solomon, CEO of Goldman Sachs Group Inc., during the Global Financial Leaders' Investment Summit in Hong Kong, China, on Tuesday, November 19, 2024.
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An “industrial renaissance” in the U.S. is fueling demand for capital, Apollo Global Management CEO Marc Rowan said at the Global Financial Leaders' Investment Summit in Hong Kong.
“There is so much demand for capital, [including through debt and equity] … What is going on here is nothing short of extraordinary,” Rowan said during a panel discussion Tuesday.
This demand has been supported by massive government spending, particularly on infrastructure, the semiconductor industry and Inflation Reduction Act projects, said the asset manager, who is reportedly running for treasury secretary under President-elect Donald Trump.
“What we're seeing is this incredible demand for capital against the backdrop of a U.S. government that's running significant deficits. I think the capital raising business will be a good business,” he said.
Industry policies, including the CHIPS and Science Act and the 2021 infrastructure legislation, justify billions of dollars in spending.
Rowan added that the US has been the largest recipient of foreign direct investment for the past three years and is expected to remain at the top this year.
Rowan and other panelists also identified energy and data centers – needed for artificial intelligence and digitalization – as growth sectors that need more capital.
Blackstone President and COO Jonathan Gray told the panel that data centers are the biggest issue across his company and the company is pouring billions into their development.
“We're doing it with equity, we're doing it with financing… that's an area we really like and we'll continue to be all-in when it comes to digital infrastructure.”
Fundraising and M&A recovery
Other panelists at the summit organized by the Hong Kong Monetary Authority said capital raising was well positioned to recover from the recent slowdown.
According to Goldman Sachs Chairman and CEO David Solomon, capital raising activity peaked in 2020 and 2021 due to massive Covid-era stimulus measures, but later slowed due to the war in Ukraine, inflationary pressures and tighter regulation the Federal Trade Commission muted.
Solomon said there has been an uptick in activity recently as conditions have normalized, along with expectations of friendlier deal regulation from the FTC under the new Donald Trump administration.
While an inflationary backdrop and other risks remain in the current environment, Morgan Stanley CEO Ted Pick said the consumer and business community is “broadly in good shape” as the economy continues to grow.
“This environment has been great when it comes to capital allocation,” he said, adding that the group was now preparing to move into “capital raising mode”.
“That means [the] “Characteristics of a growing and prosperous economy in which traditional underwriting and mergers and acquisitions prevail,” he said.
Solomon predicted these trends would lead to “more robust” capital raising and M&A activity in 2025.
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