As a newly minted countryman I am bullish about US equities as we launch our 2nd fund:
• The US is leading the AI race; not just the development of AI technologies and infrastructure (data centers), but also the implementation & application of AI. US productivity growth is 4.9% (historical average = 1.5%), making US companies more efficient & competitive. AI also accelerates research & innovation (= long-term value drivers).
• The recent tax bill permits accelerated depreciation, freeing up tax savings to be reinvested into capex and other growth investments. Alphabet budgets $185B of capex in 2026 (vs. $91B in 2025). Capex/investments = Growth.
• Ongoing efforts to reduce federal regulations drive down compliance costs. While lax ballroom permitting gets the headlines, the faster pathway to breaking ground on data center development contributes 30% of GDP growth currently annualizing 5.4% (!). Lower G&A = Higher profits = More corporate cash = Capex.
• CPI is ~2.5%. 2026 is expected to see continued drops in housing (rents). Supply-side energy policies tend to lower the oil price and provide cheaper gas (which is an input to food and many other goods). It also leads to cheaper electricity (>50% cheaper than EU), which is critical for mfg & data centers, further widening the US’s dominance in AI. There'll be some upward pricing pressure from tariffs, a tax mostly carried by US consumers/companies. Stable/lower inflation will allow 25-75 bps (per Goldman) lower interest rates. Lower cost of capital = More investment.
• The CHIPS Act, infrastructure bills, tax bill, and tariffs have incentivized repatriation and nearshoring of mfg and other industry. Mfg construction currently at $214B/yr, up from ~$75B in 2021.
• The US has the least bad demographic trends of any major economy. Younger & growing workforce (vs. shrinking in Japan/EU), more immigration (both skilled and unskilled), and (relatively) higher birth rate = Long-term growth drivers that buoy shorter-term equity values.
• >$1T of PE dry powder searching for companies to buy = Hopefully solid exit conditions for our portcos. Much of this dry powder is maturing, meaning funds need to deploy or lose it (usually at the 4yr mark). The Bain 2026 M&A report says 80% of PE executives expect increased M&A this year.
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