U.S. ‘industrial renaissance’ is driving a rebound in fundraising

U.S. ‘industrial renaissance’ is driving a rebound in fundraising

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, chief executive officer of Goldman Sachs Group Inc., during the Global Financial Leaders’ Investment Summit in Hong Kong, China, on Tuesday, Nov. 19, 2024. 

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An “industrial renaissance” in the U.S. is fueling demand for capital, Marc Rowan, CEO of Apollo Global Management said at the Global Financial Leaders’ Investment Summit in Hong Kong.

“There is so much demand for capital, [including through debt and equity] … What’s going on is nothing short of extraordinary,” Rowan said on Tuesday during a panel discussion. 

This demand has been supported by massive government spending, particularly on infrastructure, the semiconductor industry and projects under the Inflation Reduction Act, said the asset manager, who is reportedly in the running for Treasury Secretary position under President-elect Donald Trump.

“What we’re watching is this incredible demand for capital happening against a backdrop of a U.S. government that is running significant deficits. And so the capital raising business, I think that’s going to be a good business,” he said. 

Industrial policies, including the CHIPS and Science Act and the 2021 infrastructure legislation, warrant billions in spending.

Rowan added that the U.S. has been the largest recipient of foreign direct investment over the past three years and is expected to stay at the top spot this year as well.

Rowan and other panelists also identified energy and data centers — needed for artificial intelligence and digitization — as growth sectors requiring more capital. 

Blackstone President and COO Jonathan Gray told the panel that data centers were the biggest theme across his entire firm, with the company employing billions on their development.

“We’re doing it in equity, we’re doing it financing … this is a space we like a lot, and we will continue to be all in as it relates to digital infrastructure.”

Fundraising and M&A recovery

Other panelists at the summit organized by the Hong Kong Monetary Authority said that capital raising was well-positioned to recover from a recent slowdown. 

According to David Solomon, Chairman and CEO of Goldman Sachs, capital raising activity had reached peak levels in 2020 and 2021 amid massive Covid-era stimulus but later became muted amid the war in Ukraine, inflation pressures and tighter regulation from the Federal Trade Commission. 

There has been a recent pick up in activity as conditions have normalized, along with expectations of friendlier regulation on dealmaking from the FTC under the incoming Donald Trump administration, Solomon said. 

While there remains an inflationary backdrop and other risks in the current environment, Ted Pick, CEO of Morgan Stanley said that the consumer and corporate community are “by in large, in good shape” as the economy continues to grow. 

“This environment has been one where, if you are in the business of allocating capital, it’s been great,” he said, adding that the group was now gearing up to get into “raising capital mode.” 

“That is [the] hallmark of a growing and thriving economy, which is where the classic underwriting and mergers and acquisitions businesses take hold,” he said. 

Solomon predicted that these trends would see “more robust” capital raising and M&A activity in 2025.

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