November’s Issue: Investors’ Outlook On What Is Happening Around The World

Investment outlook

November’s Issue: Investors’ Outlook On What Is Happening Around The World: The US is navigating venture capital challenges while experiencing positive developments in affordable housing. Germany is facing budgetary strains, considering raising taxes and policy alterations. The UAE is thriving, with investments in tech and renewable energy enhancing property values. In the UK, the venture capital and healthcare sectors grapple with fundraising issues but stay optimistic for 2024. Switzerland, observing Germany, is focusing on government financial tactics and the possibility of elections. France, driven by biotech advancements, is contending with investor and regulatory challenges.

What is happening in Uganda?

Jon Bennion-Pedley, CEO at Investment Owl, observed a trend of unbalanced portfolios and personal wealth among investors, a pattern not unique to Uganda but prevalent globally due to current economic pressures. Many, even the wealthy, are finding themselves strapped for cash, a situation exacerbated by historically overextended investments. November often brings a heightened sense of financial scrutiny, and this year is no different. The lesson here is clear: in times of economic uncertainty, maintaining a substantial cash reserve is not just wise, it’s essential. The approach of having 15–20% of wealth in liquidity, higher than the usual 5–10%, might just be the most prudent strategy in these turbulent times. Looking ahead, we’re bracing for even more challenging conditions next year.

What is happening in Canada?

According to Keith Gillard, CEO of UpperStage Capital, Canada’s economic landscape presents a mix of challenges and opportunities. Reporting from Vancouver, he notes that inflation has moderated to 3.1%, slightly above the Bank of Canada’s target but beneficial for sectors like food and energy. However, he points out that the venture capital market is facing constraints, with limited capital supply expected to continue through 2024, marking the most difficult fundraising environment since the financial crisis. Despite these mixed signals, Keith emphasizes that 2025 looks promising. He suggests that investments made in private companies during these tough times are likely to yield significant returns, outperforming average returns in both venture capital and private equity, provided they are valued correctly for their risk.

What is happening in the US?

As stated by Howard Solomon, CEO at Viceroy Funds, the current situation in the United States, specifically in Atlanta, Georgia, is one of significant boom. He describes the city’s traffic as bumper-to-bumper, indicative of an influx of people, particularly from the Northeast. This influx has had a dramatic impact on housing prices, which Howard notes have potentially doubled in the last two years. Alongside this growth, he observes a marked increase in inflation, affecting both food prices and the general cost of living in Atlanta — a stark contrast to the situation when he arrived in the city over thirty years ago. Howard also highlights his involvement in the sector of affordable housing in Atlanta, which is seeing strong demand due to these economic changes. Additionally, Anthony Jarrin, CEO at The Cannaregio Group, highlighted the resilient performance of the U.S. economy amidst global stresses, with strong public market earnings and signs of inflation containment. He anticipates potential adjustments in interest rates that could further boost economic growth. In the private markets, he acknowledges challenges in capital raising but remains optimistic, noting the strong performance of the U.S. stock market, albeit considering it overvalued. Looking forward, he predicts a healthy correction in the stock market and finds the debt markets attractive, despite the complexities in structuring investments. Anthony’s overall outlook for 2024 is positive, bolstered by a strong performance in the research sector, reminiscent of 2019 levels, and an optimistic view of global geopolitics. Moreover, Peter N. Ackerson, GP at Audere Capital, based in New York, highlights several trends in the U.S. venture capital scene. He echoes concerns about overvalued investments in the sector, especially in later-stage funds. Despite market liquidity challenges, Ackerson notes promising advancements in frontier technologies like AI, robotics, and automation. He maintains an optimistic outlook for the U.S. economy, citing its historical resilience against global economic fluctuations and internal challenges, while emphasizing the need for discernment in navigating an increasingly complex information landscape. Echoing previous sentiments, Serhat Cicekoglu, Founder at Sente Foundry, also shares a positive outlook from his vantage point in Los Angeles. Despite market adjustments, Serhat believes in the continued potential for well-conceived projects to secure funding and anticipates a realistic realignment in the investment market. He also foresees a resurgence in the IPO market globally, which aligns well with his international investment focus.

What is happening in the UAE?

Paul Williams, founder and CEO of Spearhead Creativity, reports a booming economic environment in the UAE, fueled by a significant influx of investment and a series of high-profile events like COP28, the Dubai Shopping Festival, and the Abu Dhabi Formula 1 Grand Prix. He highlights the UAE’s attractiveness to businesses and entrepreneurs, especially in the tech and renewable energy sectors. Despite rising property prices and the cost of living, Paul views Dubai as a robust, albeit bubble-like, market, but unlikely to burst in the near future. He also points to the growth in other UAE regions like Abu Dhabi and Ras al Khaimah, noting upcoming projects like a new casino, indicative of the region’s dynamic and competitive economic landscape.

What is happening in the UK?

Bhavesh Barot, Operating Partner at Truffle Capital, notes the current challenges in raising capital, with many early-stage companies, particularly in seed and Series A rounds, struggling to secure funding and increasingly seeking bridge financing. Despite these difficulties, Bhavesh anticipates a more active 2024, highlighting that strategic investors are holding significant ‘dry powder’ and are expected to engage in acquisitions, divestitures, and mergers. He remarks on a shift from previous overvaluations and a trend towards more thorough and diligent investment practices. His outlook for 2024 in the healthcare investment space is cautiously optimistic, suggesting a potentially stronger performance than the current year, with resilient companies likely to emerge successfully from these challenging times.

What is happening in Germany?

Werner Schuenemann, MP at Xandance & Partners, shares insights from Berlin, Germany, highlighting some economic and legal challenges the country is facing. Contrasting with the widely held view of Germany as a model of efficiency and stability, he points out a recent significant legal ruling that impacts the government’s budget plans. This decision has led to a notable financial gap, prompting discussions within the coalition government about potential fiscal strategies, including tax increases. Schuenemann expresses concerns about the implications of these financial measures, particularly on the restaurant industry, where changes in VAT could adversely affect numerous establishments. He suggests that new elections could be a pathway to addressing these challenges and refrains from commenting on the broader investment environment, indicating that it is consistent with global trends.

What is happening in France?

Loretta Tioiela, Founder at Next Sequence, reports significant advancements in the AI and biotech sectors. She highlights the establishment of a new non-profit AI foundation, backed by Xavier Niel and Eric Schmidt, with a substantial investment of 330 million euros, signaling a shift in U.S. investment towards European deep tech. The presence of major venture firm A16Z in London further underscores this trend. Despite these positive developments, Loretta points out challenges such as the need for more mature investors in deep tech and the fragmented regulatory landscape in Europe, which complicates expansion for startups. The formation of the AI foundation, Qtai, is a major step for Europe, particularly France, in strengthening its role in AI innovation, though more efforts are needed to support growth and streamline regulations.

The 152nd GILC Summit brought together leading investment experts from around the world, offering in-depth analysis of evolving economic trends across various countries. Stay ahead in the global financial arena by securing your participation in the next GILC Summit. Register here.