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Global real estate is shifting from traditional “visible” assets like office towers and shopping malls to “invisible” property such as data centers. These facilities have become essential infrastructure as cloud computing and AI workloads demand massive amounts of power, cooling, and networking. According to CBRE, 95% of major investors plan to boost their allocations to data centers in 2025, with many committing $500 million or more.

The surge in demand is driving enormous capital requirements, with hyperscale facilities costing billions to build. Boston Consulting Group estimates that $1.8 trillion will be needed globally by 2030 to keep pace with AI and cloud growth. 

Despite funding challenges, investors continue to reallocate away from conventional real estate sectors toward alternatives like data centers, battery storage, and related infrastructure. While construction costs and financing hurdles pose risks, institutional capital remains active, signaling that real estate’s future will be increasingly tied to digital infrastructure.

Finsum: Artificial intelligence may also reshape physical office demand as companies adjust headcount and space needs.

Private equity leaders are cautioning that while industry assets are likely to keep expanding, the number of firms competing for those dollars could shrink dramatically. KKR’s CFO Robert Lewin and Apollo’s president Jim Zelter both suggested that smaller managers, burdened by high fixed costs and limited fundraising capacity, may not survive the next cycle. 

Lewin forecasted a wave of organic consolidation over the next five years, while Zelter warned that many firms may already have raised their last fund without realizing it. Larger players, by contrast, are positioned to thrive, offering a wider array of products and attracting investors eager to simplify their GP relationships. 

Consolidation could also accelerate through acquisitions, with bigger firms absorbing weaker rivals. 

Finsum: The same pressures are expected to spread into venture capital, where scale and distribution strength are becoming just as critical.

Recent changes allow 401(k) plans to hold private market and alternative investments, opening the door for managed accounts to expand their offerings. Managed accounts, which provide professionally managed, customizable portfolios, are seeing rapid growth, with assets reaching $13.7 trillion in 2024 and net flows topping $811 billion. 

Incorporating private equity, venture capital, private credit, and real estate into these accounts requires robust technology for reporting, valuations, and liquidity management. 

Firms like InvestCloud are creating platforms that enable scalable, model-based access to private market investments, allowing advisors to integrate these assets alongside traditional ETFs and mutual funds. Such technology also supports liquidity solutions, like lending against securities, so investors can access cash without disrupting long-term strategies. 

Finsum: With regulatory adjustments, including tweaks to the Accredited Investor rules and the 401(k) shift, managed accounts are positioned to broaden access to previously hard-to-reach alternative investments.

Blackstone’s flagship private credit fund, BCRED, is issuing $500 million of five-year investment-grade bonds, expected to yield about 1.6 percentage points above Treasuries. 

The sale comes after BCRED’s $1 billion issuance in January and follows a $650 million note deal from Ares Management’s BDC earlier this week. Goldman Sachs’s BDC is also preparing a potential offering as business development companies take advantage of renewed investor demand. 

These firms, which lend to small and midsize companies, are tapping the market before earnings blackout periods begin. Issuance overall has surged, with 27 companies selling $43 billion of debt Tuesday, the third-largest daily volume on record. Barclays, Citigroup, Goldman Sachs, RBC, and Wells Fargo are managing the deal, with proceeds earmarked for general corporate purposes.

Finsum: The timing of this private credit move is worth monitoring, as it could have implication for earnings season. 

Advisors facing heightened U.S. market volatility are increasingly turning to global infrastructure ETFs as a way to diversify portfolios and hedge against policy risks. Structural growth drivers like demographic shifts, and supportive government policies, such as Germany’s recent multi-billion-dollar funding initiatives are supportive. 

The sector also has a history of resilience during inflationary periods, as infrastructure companies provide essential services that can pass costs on to consumers. One option is the BNY Mellon Global Infrastructure Income ETF (BKGI), which actively invests in global infrastructure firms with strong cash flows, balance sheets, and growth prospects. 

BKGI aims to deliver a forward yield of 6% or higher by focusing on dividend-paying companies, with about one-third of assets in U.S. holdings and the rest diversified across Europe and beyond. 

Finsum: Infrastructure exposure offers low correlation with U.S. equities, especially when considering outside options.