Interview
Eclipse's Lior Susan on $12.5B AUM and the Bet on Physical Industries
- The firm expresses hope that assets under management have moved upward, while anticipating potential market fluctuations.
- The speaker predicts the U.S. economy could grow 5% to 7% annually and pledges personal efforts to facilitate this expansion.
- Physical companies are identified as having the strongest historical opportunities for founders, with physical industries expected to yield better multiples than SaaS due to their capacity to solve difficult problems in massive markets.
- A strategic shift from globalization to deglobalization is expected to prevent countries from relying on manufacturing, energy, and defense imports, necessitating a move toward on-shoring infrastructure and manufacturing.
- New gas turbine and energy storage companies are planned for near-term announcement, with the turbine venture aiming to compete directly with GE on a large scale.
- Gas turbines currently face a fully backlogged market with lead times extending up to five years.
- The "Eclipse economy" is projected to scale by bundling deals across three to four portfolio companies to compete with China's aligned forces of talent, policy, capital, technology, and demand.
- Continued growth in the "Eclipse economy" is anticipated, with the speaker noting that receiving pushback would likely signal success.
- Massive shortages in the memory market are expected to persist, creating a need for new entrants to increase competition.
- Demand for on-premises infrastructure is forecasted to rise driven by security, latency, cost, and AI sovereignty requirements.
- Building data centers is expected to generate a circular economic flywheel creating thousands of jobs and driving demand for energy, construction, materials, housing, and services.
- Portfolio companies like Cerebras, Redwood, SpaceX, and True Anomaly are expected to evolve from "first act" businesses into "second" and "third act" ventures to expand wallet share.
- Founders in physical industries are expected to face rising customer expectations where even minor operational issues are assumed to be solved by the founders.
- The current deglobalization trend is predicted to make it difficult for standalone companies to compete against China's comprehensive alignment of five strategic forces.
- In the event of business failure, the worst-case scenario is described as the speaker's children returning to a family banana farm, which is characterized as a manageable outcome.
- The speaker expects their children to continue working on the family banana farm annually during summer visits to their kibbutz.