Where to Invest in Future Trends (2024)

The Space-Based Economy

The vision: Most people have preconceived notions of the space economy as the Apollo moon landing and the international space station — of grand human achievements. They don’t typically think about entrepreneurs transforming nearly every major industry here on earth, but that’s the multi-trillion opportunity our venture fund focuses on. The space economy is much more than rockets and satellite hardware.

Space technologies are playing an increasingly vital role in our economy and will continue to transform the world’s largest industries. In times of uncertainty, enterprises and governments want more information, not less. Space technologies are critical infrastructure, and enterprises and governments continue to spend across market cycles.

The opportunities: The key tech stacks are GPS, geospatial intelligence [intelligence gained via analysis of imagery and signals on earth] and satellite communications. Emerging industries get a lot of media — lunar markets, space stations — but are a small part of what’s going on.

The history of GPS provides a framework for understanding how space-based technologies can create new investment opportunities. GPS was built by the government, for the government, and was off-limits to anyone else by design. But companies like Trimble and others developed commercial receivers to harness this valuable positioning signal. They made it accessible to the tech community, which built location-based services such as Google Maps, Uber, Lyft, Foursquare, and even Pokemon Go.

We see the same thing playing out in geospatial intelligence. Low-cost access to orbit via SpaceX enabled the launch of distributed networks of hundreds of small satellites, which generate an unprecedented amount of new data. We’re starting to see the first “distribution” companies in GEOINT, such as SkyWatch, as well as new applications being built on top of this dataset, like Arbol, Regrow, Indigo Ag and Shield AI, that focus on multi-trillion-dollar industries such as agriculture, insurance, construction, and more.

SpaceX will bring us into the next phase of the space economy with its Starship vehicle, which will be the world’s largest, most powerful, and first fully reusable transportation system designed to carry both crew and cargo to Earth orbit, the Moon, Mars, and beyond. It will lower the cost of getting into orbit by another order of magnitude. It will open the door to many new possibilities, from hotel-like tourism in orbit to lunar base stations, off-earth manufacturing plants, and more.

Longevity’s Promise

The vision: What our venture fund focuses on is not if we can extend life spans, but what happens when we do expand life spans — what needs to be built to accommodate an aging population. What are the implications for our infrastructure if 50% of Americans live to be 100? Stanford University’s Center on Longevity predicts a century-long life expectancy will be the norm for all newborns by 2050. What happens to the health-care systems, financial services industry, real estate, consumer services and media on a global scale?

The opportunities: Historically, aging has been a local and human services business. Since the Covid-19 pandemic, digital health, fueled by telemedicine and AI, is having a significant impact on the scalability of our expensive health-care system to better care for a growing older adult population. But technology alone can’t solve the care gap of an estimated 12.9 million health-care worker shortage projected globally by 2030. We need alternative sources of care, like family caregivers. In the US, there are at least 53 million unpaid family caregivers and there is negligible private economy or support systems for them. Those systems are just emerging and it’s an area we’re investing in — three of our portfolio companies focus on this: Aidaly, Carewell and RubyWell.

In financial services, we’re looking at new products and services to help with financial longevity and reverse the trend that half of Americans are expected to run out of money in retirement. Financial longevity requires workforce longevity and starting retirement savings earlier and more meaningfully. We’re invested in a digital-first, affordable 401(k) business, Penelope, that services small businesses and increases access to critical retirement savings products for all employees.

There’s also an opportunity in supplemental insurance for retirees — most Americans mistakenly think home health-care aides are covered in Medicare. So how do you build long-term care insurance, version 2.0? There are about four start-ups here, including HCG Secure. What caused insurance companies such trouble with earlier versions of LTC insurance was that there was no cap on what was covered. These newer products are right-sized to be able to charge lower prices, and so the reward is lower. But the firms provide services such as helping to find geriatric care managers, and know what things states may pay for. Built-in support services mean customers are less likely to need as many days of help.

There are also start-ups focused on dementia care management, because we only have 2,000 neurologists in the US and everyone is going to want these drugs. Isaac Health offers a comprehensive dementia diagnostic, plus ongoing dementia care management; Tembo Health offers complete health-care services for patients with dementia. Both businesses are fully virtual, are reimbursed by Medicaid, Medicare and select commercial insurance, and can support and educate family members impacted by their loved one’s disease.

An AI-Fueled Future

The vision: We view AI as the most transformative technology we’ve seen in the last 20-plus years. This year the market has narrowly focused on the most immediate beneficiaries and enablers of AI, namely the Magnificent 7. However, we believe the AI opportunity will broaden out beyond this group to companies focused on enabling, enhancing, and effectively leveraging AI to drive business growth.

The opportunities: We look across three AI buckets: the enablers, the data layer and applications. The enablers provide the infrastructure necessary to support AI, such as semiconductor companies, semiconductor capital equipment companies and cloud providers supplying the infrastructure and data servers critical to running AI workloads. Companies we like here include Advanced Micro Devices and Marvell Technology.

Companies in the data layer focus on enhancing data management for AI. These are data infrastructure companies that offer a place to store and analyze huge amounts of data to train large-language models, and cybersecurity solution providers. Palo Alto Networks and Snowflake are among companies we like here.

In the applications bucket you find industries that will use AI to improve products and services they offer. Longer term, companies that can leverage AI to increase efficiency, boost labor productivity and improve their products and services will be big beneficiaries. HubSpot and Adobe are examples of companies that should benefit here.

Grappling with Geopolitics

The vision: Sadly, there are many circ*mstances of violence and conflict around the world throughout history that guide our outlook on the economic consequences that may ensue. These circ*mstances always provide further proof that an eye toward diversification and a long-term perspective are essential for investors and the best strategies to safeguard wealth.

The opportunities: The world has already transitioned from the free flow of capital and globalization orthodoxy following the collapse of the Soviet Union to a new regime of bipolar spheres of influence with democracies and their allies on one side and the authoritarian regimes of China and Russia and their allies on the other. With this in mind, there are several macro factors that we view as the most consequential implications for markets.

When geopolitical tensions escalate, the resulting effects on the stock market can present a mixed picture for investors. As uncertainty heightens, sectors like defense and cybersecurity often inevitably see a surge in demand due to increased security needs. This uptick in demand can attract investors, boosting stock valuations for firms operating within this space.

Additionally, the dollar is likely to emerge as a haven for investors seeking stability, which tends to bolster its value. This dynamic can have a multifaceted impact on the global economy. A stronger dollar can skew trade balances by making American exports more expensive and imports cheaper. Additionally, when US companies repatriate earnings from abroad, the conversion into a stronger dollar can result in diminished profits, affecting their bottom line.

Lastly, any Middle East conflict can increase the price of oil. However, several factors may hold it in check. Domestically, global oil prices are denominated in US dollars, so a stronger dollar helps hold the price of oil down. Globally, US-imposed sanctions on Russia and China’s slowing industrial growth are also factors to consider. Saudi Arabia has also already telegraphed a potential increase in production if oil prices climb toward $100.

Healthy Returns

The vision: Historically, investors have seen health care as a haven for stability. That can still be said, broadly speaking, but there is much more to be excited about. Long-term demographic trends, wide differences in outlooks for businesses and constant innovation, such as the developments in weight-loss drugs, make health care one of the most interesting spaces to be in as an active manager.

The opportunities: It is no secret that with age comes more spending on health care. But what is often overlooked is just how much the world is aging. Demographics across developed markets continue to shift older, notably in the US, which in terms of health-care spending means consistently higher demand. This is a long-term tailwind for a sector that has always held the reputation for consistent earnings growth.

Not all companies will benefit from that tailwind. Today many of the leading pharmaceutical companies face meaningful patent expirations that we believe the market is underestimating in their investment analysis. Investors must identify these distortions to avoid pitfalls and consistently hunt for the next big innovation.

There is no better example than the rapid development in the weight-loss medication space, known as GLP-1s. Already, the long-term implications of these looming mega-blockbusters are setting into the market. To identify the magnitude of impact that GLP-1s could have, our research analysts turned to alternative data to complement deep domain expertise. By gauging early sentiment of users on social media, the team identified just how meaningful the results of these weight loss drugs could be for a user. When you then place into context that there are over 100 million people with obesity in the US alone, the potential total addressable market for these life-changing drugs could be in the hundreds of billions of dollars.