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HSBC Funding the Future Survey

  • Article
  • Venture capital investors expect a pickup in activity after two tough years, according to our new HSBC survey
  • Both institutional and VC investors are optimistic on tech and healthcare but have different perceptions of risks and opportunities
  • We explore catalysts, exit strategies, IPO outlook, and more influential high-growth sectors

Investor views on high-growth sectors and venture capital

Increase in VC activity anticipated

Venture capital (VC) is back in business, according to HSBC’s inaugural Funding the Future Survey. Nearly 80% of the private investors we surveyed expect a pickup in VC activity over the next 12 months.

Our new survey provides proprietary insights into investor views on VC, private equity (PE) and listed high-growth sectors. A total of 204 market professionals took part in this first edition, representing more than USD2.3trn in assets, of which the VC/PE market made up USD507bn. The fieldwork was carried out between 11 March and 12 April 2024.

While venture capital is a significant sector in its own right, its wider influence on public markets is a key reason why we aim to give a window into the world of VC investors – their outlook, positioning, strategies, and plans. By also asking questions of investors who focus primarily on listed companies, we believe our survey offers a rich perspective on high-growth sectors.

HSBC’s Funding the Future provides valuable insights at what could be a pivotal moment for the VC market:

  • Confidence and momentum: The overall investor sentiment on the VC sector is bullish. Alongside a clear expectation that VC market activity will pick up, investors think fundraising conditions are set to improve. If these expectations are borne out, it could mark a turning point for the sector.
  • Growth potential: VC investors say they have most exposure to information technology (IT), financials, and healthcare, which are sectors often perceived as having the potential for fast growth. IT is the clear standout in terms of overweight positioning on the significant interest in artificial intelligence (AI).
  • Listed tech investors love AI: Listed tech investors are optimistic, with over 90% bullish or neutral on the sector. AI, cloud, and datacentres are the most favourable investment theme for listed investors.
  • Biopharma optimism: The majority of respondents invested in listed healthcare said they are overweight the sector. For VC healthcare investors, biopharma and health-tech are the preferred sectors.
  • Exit velocity: More than three quarters of private investors plan to exit companies in their portfolios in the next 12 months, perhaps reflecting the recent resilience of global equities; the US is overwhelmingly their favoured location for taking VC investments public. The majority also expect IPO activity to pick up over the next 12 months.
  • Risks and catalysts: Political risks are the greatest concern of VC and listed investors, according to the survey, just ahead of the global rates environment. VC respondents see ESG as a tailwind rather than a headwind.

Would you like to find out more? We are holding a Live Insights event on 23 May to discuss the report’s key findings, streamed exclusively on our LinkedIn channel. You will also have the chance to ask your own questions. Click here to find out more and to register.

To learn more about HSBC Global Research, please email us at AskResearch@hsbc.com

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