What the world's largest alternative asset manager is watching now

All figures are as of March 31, 2026 unless otherwise stated.

At the start of every year, investment houses publish their outlooks. By mid-year, many are already rewriting them. Not Blackstone.

The world's largest alternative asset manager says the themes it identified six months ago remain largely intact. Artificial intelligence remains the defining investment story, the US economy continues to prove remarkably resilient, inflation should gradually ease despite short-term bumps, and private markets are becoming increasingly important in funding the next wave of economic growth.

What makes Blackstone's outlook particularly interesting isn't simply the conclusions, but how it reaches them. Rather than relying solely on public economic data, the firm analyses information from more than 280 portfolio companies, over 5,100 credit issuers, around 740,000 portfolio company employees and approximately 13,000 real estate assets. 

That proprietary dataset underpins its latest investment perspectives and reinforces its conviction in five structural themes driving markets.

1. AI is no longer just a technology story

If there is one message that runs through the entire report, it is that AI remains "the main thing", but Blackstone argues investors are still underestimating where the opportunity lies.

Rather than focusing solely on software companies or large language models, the firm believes the biggest beneficiaries will be the businesses supplying the physical infrastructure required to make AI work. Data centres, electricity generation, transmission networks, cooling systems, semiconductors and industrial infrastructure all sit at the heart of what it describes as a multi-year capital expenditure cycle.

The numbers, as we know by now, are extraordinary. Spending by the world's five largest hyperscalers on data centre infrastructure is expected to rise from US$237 billion in 2024 to around US$1 trillion by 2027 - see chart below(1). Meanwhile, enterprise AI adoption is increasingly shifting from experimentation to full deployment.

Importantly, Blackstone believes these infrastructure bottlenecks are likely to create scarcity value. Power has become one of the biggest constraints on AI expansion, with electricity demand forecast to rise more than 50% globally over the next five years while ageing grids struggle to keep pace. Businesses controlling these scarce physical assets could therefore capture a disproportionate share of future value creation.

2. Economic growth is proving resilient 

Despite another year dominated by geopolitical shocks, Blackstone argues the global economy continues to display remarkable resilience.

Corporate earnings remain healthy, business confidence is strong and consumer spending has largely held up, albeit unevenly across income groups. More than 90% of surveyed Blackstone CEOs expect business conditions to remain stable or improve over the next 6-12 months. Additionally, Blackstone portfolio company revenue grew 10% in the first quarter this year - led by Asia at 14% and the United States at 11% - with Europe growing more modestly at 2%.

The firm acknowledges that growth remains uneven geographically, with Europe lagging the United States and Asia, but it sees continued strength in sectors linked to electrification, energy infrastructure and digital infrastructure.

Perhaps the more interesting observation is that volatility itself has become normal. This is now the fifth time in six years that markets have experienced a major disruption during the first half of the year, yet economic activity has repeatedly proven more durable than many investors anticipated.

3. Labour markets are healing, not weakening

Labour markets have shifted from post-pandemic shortages towards a healthier balance. Hiring challenges have eased, wage pressures have moderated and productivity is beginning to improve.

Only 29% of surveyed Blackstone CEOs reported difficulty finding workers, compared with more than 90% just a few years ago, while wage growth across portfolio companies has stabilised at around 3% year over year. 

The bigger story, however, is productivity. Blackstone believes AI has barely begun influencing the broader workforce, yet US labour productivity is already running at almost double the pace experienced over the previous 15 years. 

If AI adoption accelerates as expected, productivity gains could become one of the biggest long-term drivers of economic growth while simultaneously helping ease inflationary pressures.

4. Inflation faces near-term pressures but should cool over time

Inflation remains complicated in the short term, according to Blackstone. Energy prices, geopolitical tensions and AI-driven capital spending continue to place upward pressure on input costs, particularly outside the United States. But the argument is that investors should look beyond the headlines.

The firm believes the underlying inflation picture is already improving thanks to moderating wages, falling shelter costs and stronger productivity. Using its own real-time housing data, it estimates underlying shelter inflation is running meaningfully below official CPI measures, implying inflation may already be closer to central bank targets than widely believed.

Looking further ahead, Blackstone sees AI-driven productivity improvements as one of the most important long-term disinflationary forces now emerging.

5. Private markets are positioned to fund the next investment boom

The report ultimately argues that many of today's biggest investment opportunities require patient, flexible capital.

Whether it's building data centres, financing electricity grids or expanding private credit, demand is growing much faster than traditional funding sources can accommodate. Blackstone sees opportunities across private markets, including in private credit and private equity.

Private credit compares favourably with past cycles, with direct lending growing into a significant and well structured alternative to traditional bank financing. More broadly, some of the most compelling areas of growth in private credit are emerging in asset-backed markets where traditional lenders are retrenching and private capital is increasingly stepping in. The US asset-based finance market is estimated at roughly US$30 trillion — approximately 20 times the size of the corporate direct lending market — yet banks still hold roughly 90% of this exposure.

Within private equity, Blackstone believes larger, higher-quality businesses remain best positioned to capture productivity gains from AI while benefiting from improving exit markets and renewed IPO activity.

There is a common thread running through all of these opportunities, and that is that where demand is structurally strong, supply is constrained and enormous amounts of capital are required, private markets are increasingly likely to play a central role.

For investors, Blackstone's message is equally simple. Ignore the daily headlines and focus instead on the structural forces reshaping the global economy. AI may be the catalyst, but the investment opportunity extends well beyond technology itself, reaching into the physical assets, infrastructure and financing required to support the next decade of growth. 

Learn more

Click here to download Blackstone’s full 2026 Mid-Year Investment Perspectives report.

For more insights from Blackstone, please visit their website.

Disclaimer 

The information in this material is general information only and is intended solely for licensed financial advisers or authorised representatives of licensed financial advisers and wholesale client investors. It is not intended to constitute financial product advice or an offer, invitation, solicitation or recommendation to invest. This information must not be distributed, delivered, disclosed or otherwise disseminated to any investor. It has been prepared without taking into account any person’s investment objectives, financial situation or needs. Investors should consider whether the information is suitable to their circumstances.

Endnote:

1. Morgan Stanley Equity Research and publicly reported figures. Includes finance lease liabilities as of May 5, 2026.