Back in February, we covered fundraising trends shaping the early part of 2025. Since then, investor sentiment and market dynamics have shifted meaningfully. Today, we’re diving into the key investment trends that have emerged thus far in 2025 — from AI-driven strategies and capital spending booms to a reevaluation of ESG and increased interest in alternatives.
Whether you're an institutional allocator, fund manager, or sophisticated family office, these themes are worth watching closely.
1. AI Is Reshaping Investment Strategy
Artificial Intelligence continues to drive structural change across public and private markets. Hedge funds like Citadel, WorldQuant, and Freestone Grove are now leveraging AI models for everything from market predictions to operational efficiencies. While this is unlocking new alpha sources, there's growing consensus that human oversight remains essential.
Key Tickers: NVDA (NVIDIA), ADBE (Adobe), SNOW (Snowflake), MSFT (Microsoft)
2. Big Tech Embraces Capital Intensity
Major tech firms have flipped the script — evolving from asset-light innovators to capital-heavy infrastructure builders. Microsoft’s (MSFT) capex now approaches 30% of its revenue, as it invests heavily in AI infrastructure and data centers. Alphabet (GOOGL), Amazon (AMZN), and Meta (META) are all following suit.
This has direct implications for investors: while growth persists, return on capital is shrinking.
Key Tickers: MSFT, GOOGL, AMZN, META
3. Investor Sentiment Turns Defensive
A recent J.D. Power survey found that 56% of U.S. investors believe this is the most difficult investment climate they've ever faced. Rising tariffs, geopolitical tension, and policy uncertainty have created heightened volatility — especially in public equities. Interestingly, younger investors are increasingly turning to professional wealth advisors for guidance.
Key Tickers: VIX (CBOE Volatility Index), SCHW (Charles Schwab), MS (Morgan Stanley)
4. Global Diversification Back in Focus
At this year's Milken Global Conference, one message was clear: investors are looking beyond the U.S. Amid concerns over trade policy and valuation peaks, European markets are getting a second look — especially given favorable policy conditions and lower multiples.
Key Tickers: VGK (Vanguard FTSE Europe ETF), EWU (iShares UK ETF), EWG (iShares Germany ETF)
5. ESG Investing Faces Crosswinds
After a record decade of growth, ESG strategies are seeing serious pushback. In 2025, ESG funds experienced their largest outflows in years, driven by both political scrutiny and underperformance in high-interest-rate environments. That said, some believe this is simply a shakeout that will leave stronger ESG products behind.
Key Tickers: ESGU (iShares ESG Aware ETF), TAN (Invesco Solar ETF), XLE (Energy Select Sector SPDR Fund)
6. Alternatives Are in Demand
Institutions are pushing deeper into private credit, infrastructure, and real assets. Brookfield Asset Management (BAM) recently raised over $25 billion across various strategies. This aligns with a broader trend: capital is flowing to sectors that are less correlated with traditional equities and fixed income.
Key Tickers: BAM, BX (Blackstone), KKR, APO (Apollo Global)
Final Thoughts
As we move into the second half of 2025, investors are navigating a more complex, fragmented, and opportunity-rich environment. AI and infrastructure are rewriting growth models. Traditional risk-on strategies are being challenged. And interest in differentiated, non-public opportunities continues to rise.
If you’re evaluating how to position your portfolio or fund strategy in light of these themes, we’d love to connect.
Have questions or want to discuss any of these trends further? Reach out to us at [chris@maverickcapitaladvisors.com].