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HSBC Funding the Future Survey - AI and the IPO window
The tenth edition of our proprietary Funding the Future Survey finds that private market investors see stronger deal prices, but raising fresh funds remains tough. Their concerns about AI are also changing.
Carried out by Survation, this survey captures the views of 217 global investors representing a significant portion of the private and public high-growth investment community. Survey participants represented AUM of USD3.6trn, of which cUSD1.5trn is attributed to VC and private equity (PE) investors. The fieldwork took place from 15 September to 12 October 2026.
Private investors are modestly more confident about the coming quarter than they were in July, with 48% expecting an increase in VC and PE activity, against 44%. The 12-month view has softened to 54% from 64%, though as the regional section shows, that fall is concentrated in Asia Pacific rather than spread across the market.
54%
Of private investors are confident about the coming 12 months, the lowest in the survey’s history
The deals in front of investors look better than at any point in the survey's history. Some 51% report that recent financings in their universe have mostly been up rounds, the highest reading we have recorded, while only 3% report mostly down rounds, the lowest. On aggregate it would seem the repricing that defined 2022 and 2023 appears to have worked its way through. On closer inspection, however, AI deals are a big driver of this trend.
What has not recovered is the supply of new capital. Only 21% of private investors expect fundraising conditions to improve over the coming year, down from 34% in July, and the deterioration holds in every region we track. The share reporting that their dry powder has increased over the last twelve months has fallen to 23%, a series low. Investors are deploying faster than they are raising.
75%
Of private investors expect a US interest rate hike
The macro backdrop has moved against them. Three quarters of private investors and 77% of listed investors now expect the next move in US interest rates to be a hike, having expected no change as recently as July. Market pricing has moved the same way in the past few months, so the survey is confirming the repricing. For private markets the consequences of the changing rate environment have become the single largest headwind investors name, cited by 87% against 66% in July, and expectations around ask/bid spreads have deteriorated almost as sharply.
AI remains the overwhelming answer to where private capital is going, named by 85% of private investors as the sector they expect to attract the most private-market investment over the coming quarter.
Some 56% now think a meaningful slowdown in AI infrastructure spending is likely within six to twelve months, up from 51%, with those calling it very likely rising to 20% from 11%. Asked where such a slowdown would be felt most, 55% now name data centre real estate and colocation providers, against 24% in July. Hyperscale cloud providers have fallen from 33% to 20%, and specialised AI compute and chip vendors from 25% to 15%. Four further survey responses point the same way: energy and power availability has risen to the second-largest potential upside for AI capex; anxiety about chip supply has eased; infrastructure and energy has overtaken technology as the expected growth area in private direct lending; and the energy transition has become the fastest-rising of the long-term themes we track.
Against all this, we think investors remain committed to the theme but are more willing to act on disappointment than they were earlier in the year. Some 29% would now cut AI exposure by a quarter if their named downside materialised, against 7% in July.
85%
Of private investors are planning to exit at least one portfolio company in the next twelve months
Exit intent is at a series high, with 85% of private investors planning to exit at least one portfolio company in the next twelve months. Trade sales remain the preferred route at 73%, but buyouts have fallen to 35% from 46%, consistent with a higher expected cost of leverage, while IPOs (initial public offerings) have risen to 35% and mergers to 31% from 17%.
What investors expect to list has shifted decisively towards AI, named by 63% against 36% in July. One long-standing finding from our survey has changed in this wave: the share of investors preferring their portfolio companies to list in the US has fallen to 57% from 79%, while the share stating a preference for an Asian listing has doubled to 18%, similar to those preferring EMEA (18%).
The following analyst(s), who is(are) primarily responsible for this document, certifies(y) that the opinion(s), views or forecasts expressed herein accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Shiva Joon, CFA
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HSBC Emerging Markets Sentiment Survey - Less bull, more bite
This edition – the 25th in the series – captures a shift in investors’ approach to emerging markets (EM). Bullish expectations have moderated, but risk appetite has recovered. Investors also have more cash available to put to work.
