Capital Demand Surges in the US: A New Era of Industrial Renaissance
A surge in capital demand is driving growth in the US, according to Marc Rowan, CEO of Apollo Global Management. Speaking at the Global Financial Leaders’ Investment Summit in Hong Kong, Rowan emphasized that this demand is fueled by massive government spending on infrastructure, the semiconductor industry, and projects under the Inflation Reduction Act.
Government Spending Fuels Capital Demand
The US government’s significant deficits have created a backdrop for a thriving capital raising business. Rowan believes that this trend will continue, driven by industrial policies such as the CHIPS and Science Act and the 2021 infrastructure legislation, which warrant billions in spending.
Foreign Direct Investment Soars
The US has been the largest recipient of foreign direct investment over the past three years and is expected to maintain its top spot this year. This influx of foreign capital is further fueling the demand for capital in the US.
Growth Sectors Emerge
Energy and data centers, necessary for artificial intelligence and digitization, have been identified as growth sectors requiring more capital. Blackstone President and COO Jonathan Gray highlighted data centers as a key theme across his entire firm, with billions invested in their development.
Capital Raising Set to Recover
Panelists at the summit, including David Solomon, chairman and CEO of Goldman Sachs, believe that capital raising activity is poised to recover from a recent slowdown. A recent pickup in activity, combined with expectations of friendlier regulation on dealmaking, suggests a promising outlook for capital raising.
Economic Growth Drives Confidence
Ted Pick, CEO of Morgan Stanley, expressed confidence in the consumer and corporate community, citing their resilience in the face of inflationary pressures and other risks. As the economy continues to grow, Pick believes that the group is now gearing up to enter “raising capital mode.”
Robust Capital Raising Ahead
Solomon predicts that these trends will lead to “more robust” capital raising and M&A activity in 2025. With the economy thriving, the classic underwriting and mergers and acquisitions businesses are set to take hold.
A New Era of Growth
The surge in capital demand, driven by government spending and foreign direct investment, signals a new era of industrial renaissance in the US. As the economy continues to grow, confidence in the capital raising business is set to soar.
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