Nigel Yates, UK equity portfolio manager at BNP Paribas Asset Managers, considers the arrival of a new era for equity investors.
For most of my career, capital expenditure was the line in the accounts that finance directors defended and investors quietly penalised. The winning formula of the 2010s was asset-light: software margins, buybacks, and capital returned rather than deployed.
That era is over.
We are now in the middle of the largest synchronised capital investment cycle I have seen, global in scale and driven by technology, security and decades of under-investment in the physical fabric of our economies. And the UK, for once, is not a bystander.
I see four powerful trends that have the potential to create big opportunities: AI, housing, defence and water.
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