From left, Jonathan Gray, President and COO of Blackstone Inc., Ron O’Hanley, CEO of State Street Corp., Ted Pick, CEO of Morgan Stanley, and Marc Rowan, CEO of Apollo Global Management. David Solomon, CEO of Goldman Sachs Group Inc., LLC, attended the Global Financial Leaders Investment Summit in Hong Kong, China, Tuesday, November 19, 2024.
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Marc Rowan, CEO of Apollo Global Management, said at the Global Financial Leaders’ Investment Summit in Hong Kong that an “industrial renaissance” in the United States was driving capital demand.
“There is so much demand for capital (both debt and equity). What’s going on is just incredible,” Rowan said during a panel discussion Tuesday.
Those demands have been backed by massive government spending, particularly on infrastructure, the semiconductor industry and projects under the Inflation Reduction Act, said the asset manager, who is reportedly running for President-elect Donald Trump’s Treasury secretary.
“What we’re seeing is a huge demand for capital coming against the backdrop of a U.S. government that’s running a significant deficit. So I think the business of raising capital is going to be a good business,” he said.
CHIPS and industrial policies, including the Science Act and the Infrastructure Act of 2021, ensure billions of dollars in spending.
Rowan added that the United States has been the largest recipient of foreign direct investment (FDI) for the past three years and is expected to maintain its top spot this year.
Rowan and other panelists also identified energy and data centers needed for artificial intelligence and digitalization as growth sectors that require more capital.
Jonathan Gray, Blackstone’s president and COO, told the panel that data centers are the biggest topic across the company and that the company has invested billions of dollars in development.
“We are financing on an equity basis… This is a space we are very excited about and we will continue to go all in when it comes to digital infrastructure.”
Financing and M&A recovery
Other panelists at the summit hosted by the Hong Kong Monetary Authority said capital raising was well-positioned to recover from the recent downturn.
Capital-raising activity reached record highs in 2020 and 2021 due to massive Covid-era stimulus, but has since muted due to the war in Ukraine, inflationary pressures and tighter regulations from the Federal Trade Commission, according to Goldman Sachs Chairman and CEO David Solomon. It’s done.
Solomon said there has been a recent increase in activity as things return to normal, along with expectations of friendlier regulation of trades from the FTC under the incoming Donald Trump administration.
Although the inflation backdrop and other risks remain in the current environment, Morgan Stanley CEO Ted Pick said the consumer and business communities are “generally in good shape” as the economy continues to grow.
“The environment has been very good for the business to allocate capital,” he said, adding that the group was now preparing to enter “capital raising mode”.
“This is the hallmark of a growing and prosperous economy, and this is where the classic mergers and acquisitions business has its place,” he said.
Solomon predicted this trend will see “stronger” capital raising and M&A activity in 2025.
