Capital in Motion: Repositioning at Scale for the Next Cycle | Global Conference 2026

Geopolitical Shift & Capital Reprioritization

• The war in the Middle East and Ukraine, alongside tariff discussions, has triggered a "reprioritization of global priorities" where national security (energy, data, supply chains) is the single highest political and economic priority for nations.
• Carlyle sees a shift from "just-in-time" inventory to supply chains built for "material disruption" resilience.
• Harvey Norman (Carlyle) notes that the "fabric" of global markets over the last 50 years is changing in real-time, creating new investment opportunities.
• Ron Chernoff (State Street) highlights a "re-globalization" driven by the need for defense, rebuilding, and resilience, noting the Strait of Hormuz has been crossed, forcing lower dependency on it.
• The $3.2 trillion deployed by Gulf states and sovereign wealth funds is expected to see a net reduction in capital outflows as these nations pivot inward toward domestic defense and resilience needs.

AI: Investment Thesis & Operational Impact

• AI is identified as the dominant investment theme for the next decade, with Morgan Stanley estimating the capital deployment cycle is only 10–15% complete.
• Jensen Huang (Nvidia) posits "Compute equals intelligence," and intelligence equals revenue/expenses; Morgan Stanley views this as a massive Total Addressable Market (TAM).
• Carlyle (2,500 employees) is deploying AI to enhance decision-making in credit, private equity, and real estate, leveraging 750,000 employees across its portfolio companies as a data asset.
• CalPERS is focusing on AI governance, specifically monitoring "human capital disruption" and retraining programs for public and private portfolio companies to mitigate retirement system risks.
• Morgan Stanley is creating "baskets" of optimal AI deployers (non-infrastructure) to capture alpha, tracking metrics like margins and ROE to distinguish winners from laggards.
• Harvey Norman warns of the "exponential compounding effect of cyber" and risks associated with "vibe coding" lowering barriers for skilled attacks.

Private Credit & Market Dynamics

• Experts dismiss "systemic risk" narratives surrounding private credit, characterizing recent issues as a healthy move to a different stage of the credit cycle rather than a structural collapse.
• Ron Chernoff and Dan Solberg note private credit acts as a "distributor of risk" (unlike 2008 banks as concentrators), with the semi-liquid segment representing only ~2% of the global wealth wallet ($200B of a $10T market).
• Carlyle raised $5 billion in "alpha-invest" funds in advance of formal fundraising by creating a liquidity solution for clients seeking exposure to a new US bio fund.
• Concerns remain regarding semi-liquid vehicles for retail investors and the potential for liquidity mismatches, though advisors are viewed as sophisticated enough to understand the risks.
• Morgan Stanley sees a shift in funding sources for data centers, utilizing unsecured bonds, private credit, and GP-backed loans from hyperscalers rather than relying solely on traditional bank lending.

Portfolio Allocation & Regional Opportunities

• US Market: Remains the primary element for capital deployment due to innovation and AI dominance; Morgan Stanley notes being overweight US has been a successful trade.
• Japan & Asia: Identified as key growth markets with robust capital markets and demographic advantages; Carlyle views European alpha vs. beta as a source of opportunity despite weak GDP beta.
• Emerging Markets: CalPERS expresses caution regarding high-deficit emerging economies, citing geopolitical splintering and the risk of these markets losing out on capital flow to developed nations.
• Private Equity Strategy: CalPERS maintains ~20% of its portfolio in private markets, emphasizing manager selection and "saying no quickly" to avoid the pacing errors of the previous decade.

Forward-Looking Statements & Risks

• Capital Demand: The demand for capital will rise significantly to fund national security, energy transitions, and AI infrastructure.
• Productivity vs. Unemployment: While Carlyle is a "buyer of the productivity story," CalPERS voices concern over second-order social impacts, including potential displacement of entry-level roles (e.g., gig economy) without adequate retraining.
• Market Overbuild: Concerns about overbuilding in data centers are tempered by the durability of energy infrastructure and the immediate "sold out" status of compute capacity.
• Fraud & Underwriting: No participant views the current environment as a credit cycle downturn requiring divestment, but all emphasize the need for rigorous underwriting as fraud detection remains difficult across both public and private credit.