On 25 February 2026, we had the privilege of bringing together our members and other leaders in global business and investing for FCLT Summit 2026, FCLTGlobal’s annual convening, where we address the most pressing challenges facing long-term value creation in today’s capital markets. Thank you to all participants for bringing your insight, candor, and commitment to FCLT Summit 2026.
We find ourselves at a turning point for companies and investors operating across global markets. Forces that once moved gradually — technology, capital flows, industrial competition, and policy — are now advancing at a pace and scale that challenge traditional long-term planning. Innovation cycles are accelerating. Private and public markets are converging in interesting ways. And geopolitical tensions are reshaping global supply chains, investment strategies, and the economics of growth. For long-term organizations, the question is no longer whether the landscape is changing, but how to make decisions amid rapid, uneven, and often conflicting pressures.
In years past, our annual “Blue Book” showcased projects and initiatives from across our membership that were in the spirit of our mission: focusing capital on the long term. Examples spanned the length and breadth of the investment value chain, covering various countries, industries, and issues. Offering case studies into the long-term practices of leading global companies and investors is a critical component of driving broader acceptance of our school of thought.
This year, in light of the current uncertainty, this project encapsulates our and our members’ views regarding the most pressing issues confronting capital markets, which we have gathered through peer-to-peer conversations and group discussions at FCLT Summit.
In 2026, we examined three structural shifts shaping long-term strategy:
Companies are making big bets on AI, either as developers or implementers of advancing technologies. Investors, meanwhile, are investing in their own AI capabilities and in portfolio companies that will be transformed by it. As this trend continues with no sign of slowing, are traditional sources of capital a structural mismatch for today’s needs for innovation and transformation? In times of uncertainty, investors typically seek liquidity, an ability to reallocate funds, and visible traction. Breakthrough innovation, by contrast, demands long time horizons, sustained capital, and tolerance for ambiguity.
Participants broadly agreed that AI has not merely highlighted existing risks but has materially changed them. Software and technology businesses were historically priced as ongoing businesses, but AI has introduced a new level of
uncertainty about which companies will survive, thrive, or fail. As one participant put it, the “possibility and certainty of disruption is far greater than we all understood.” The traditional framework for evaluating competitive advantage is being destabilized: it is now far more difficult to assess how large or defensible any company’s “moat” will be in an AI-enabled landscape.
There was also agreement that this disruption is exponential rather than cyclical. AIis simultaneously repricing legacy holdings across sectors while creating new investment opportunities, and traditional asset allocation approaches are not well-suited to capture this exposure. The likely result is greater dispersion of returns, with value concentrating among a small number of dominant players.
A recurring theme was the tension between incumbents’ inherent advantages and limitations. Large companies benefit from proprietary data, physical assets, established customer relationships, and capital scale. But these same organizations tend to be bureaucratic, risk-averse, and structured around optimizing existing profit pools rather than cannibalizing them. As one participant observed, incumbents hold “pockets of profit they don’t really deserve,” and the longer they delay transformation, the more vulnerable they become to faster-moving entrants. The critical differentiator, participants suggested, is management quality: specifically, the ability to see beyond the next quarter, rewire operating models, and make bold decisions under uncertainty.
The emergence of AI foundation model providers as both infrastructure partners and direct competitors adds another layer of complexity; such companies have business models that only work if they move into the systems and sectors they currently serve, making them potential competitors to the very companies relying on them today.
There was meaningful debate about whether public markets can adequately fund breakthrough innovation. The consensus leaned toward private markets being better suited to this task in the current environment, though not universally. Several participants noted that most genuine innovation in sectors like pharmaceuticals is now happening in private markets, with public markets largely serving as an exitmechanism rather than a primary source of risk capital. One participant noted pointedly that “distribution is not innovation.”
At the same time, others pushed back on the idea that public markets are fundamentally misaligned, arguing that they have historically funded innovation, sometimes irrationally, and that their depth and liquidity remain significant advantages. Public markets also allow investors to change their minds quickly, a meaningful benefit in a period of high uncertainty.
What has clearly shifted is the source of capital for large-scale innovation. Even major technology companies are increasingly turning to private credit, joint ventures, and sovereign capital to fund infrastructure-heavy investments like data centers, preferring to keep balance sheets clean and maintain optionality. The line between public and private funding has blurred considerably, a point we revisited later in the day.
There was no consensus on whether AI is systematically crowding out other formsof innovation, but several categories drew repeated concern: climate and energy transition, physical infrastructure, basic scientific research, healthcare and drug development, and workforce development and education. The common thread is that these are areas with long payoff horizons, significant public goods characteristics, or both, making them structurally less competitive for private capital when a dominant thematic absorbs available risk appetite.
One participant noted that “you can have new data centers as bridges collapse,” capturing the concern that AI investment may be consuming capital and political attention that foundational infrastructure desperately needs. Another raised the particular vulnerability of government-funded basic research, which has historically underpinned private sector innovation but is increasingly at risk.
Investments in human capital, including workforce training, wage protection, andentry-level job creation, were also flagged as likely casualties. Non-AI skills development and education technology were seen as under-supported relative to their long-term importance.
Many participants returned to the social and economic consequences of AI-driven job displacement. The concern is not simply that jobs will be lost, but that the transition will be uneven and the lag between displacement and reabsorption could be long and politically destabilizing.
The macro risk is that GDP rises while employment falls, producing productivity statistics that mask genuine social stress. White-collar and knowledge-worker roles are more exposed than initially assumed, with back-office services, financial analysis, and professional services already under pressure. Several participants pointed to emotional intelligence, judgment, and relationship management as the durable skills of the next era, with one participant framing it as “EQ vs. IQ.”
When participants considered how their behavior would change with a genuine 15-to-20-year investment horizon, several observations emerged.
There was also discussion of a potential strategic reorientation toward a “HALO” framework: heavy asset, low obsolescence investments such as industrials, utilities, and physical infrastructure that offer durable cash flows and are less exposed to rapid technological displacement. The broader observation was that the current investment environment creates a structural mismatch: the decisions with the greatest long-term consequence are precisely those that current incentive structures most discourage.
As the traditional boundaries between public and private markets blur, will private markets adopt the same short-term behaviors often criticized in public markets? With retail investors now accessing private equity through democratized platforms and traditional private market investors facing pressure for quicker returns, the fundamental assumptions about “patient capital” are being challenged.
Across nearly every discussion group, participants questioned whether private markets still offer sufficient compensation for illiquidity. Several noted that a meaningful share of private equity’s outperformance over the past decade was driven by the low interest rate environment rather than operational value creation, and that this tailwind has faded. As one participant put it, the question is no longer whether private markets have delivered, but “whether the illiquidity premium is justifiable enough to play in the space.” Dispersion of returns across managers was seen as the key variable, making manager selection and co-investment critical.
There was no consensus on what “long-term” truly means in a private markets context. A more fundamental tension emerged: the business models of many large PE firms now require continuous deployment and growing AUM, which can work against selectivity and patience. One participant observed that “the duration of patience is correlated to confidence that your managers will find alpha,” and that this confidence is being tested in the current environment.
The danger of treating private markets as a monolithic asset class was a recurring theme. Participants drew sharp distinctions between venture capital, growth equity, control PE, private credit, infrastructure, and secondaries, each with different return profiles, risk characteristics, and time horizons. Private credit in particular attracted significant discussion, with participants noting its proximity to retail and insurance capital, the importance of stress-testing underlying structures, and the risk that leverage in certain vehicles could create short-term volatility inconsistent with the asset class’s long-term positioning.
Discussions again highlighted a blurring of the line between public and private markets, particularly in credit. Continuation vehicles, secondaries, evergreen structures, and semi-liquid products are making private assets more accessible and more liquid, but participants disagreed about whether this is a positive development. Some argued that additional liquidity mechanisms allow investors to hold assets longer; others worried these innovations are quietly replicating the short-term pressures of public markets. As one participant noted, the question is whether alternative liquidity structures “allow you to be more long term, or do they make private companies like public companies?” Continuation funds were defended as a discipline tool when used correctly, allowing GPs to hold successful investments through additional growth phases rather than being forced to exit.
The governance difference between public and private markets was one of the most consistently cited reasons for private markets’ structural advantage. In private settings, boards are more engaged, management is better aligned, and owners have real ability to drive operational change. In public markets, proxy advisory influence, quarterly reporting pressures, and restrictions on large shareholders were pointed to as friction points that undermine genuine long-term stewardship. Several participants raised the concern that public market governance is deteriorating while private market capabilities, in operations, supplychain management, and AI integration, continue to advance.
There was broad agreement, in principle, that retail investors should have access to private markets. However, skepticism ran deep about whether currentstructures are fit for purpose. The core problem is managing both the “stock” of illiquid holdings and the “flow” of ongoing commitments across market cycles, something that requires sophistication most retail investors do not have. Participants warned that in a downturn, liquidity gates could “jam up quickly” and investors who do not fully understand what they own could face seriouslosses. One participant framed the fundamental challenge simply: retail investors are structurally among the most long-term in their actual needs yet remain at a disadvantage in accessing the asset class designed for long-term capital. Theconsensus was that investor education and product structure need to advance significantly before broad retail access is appropriate.
Despite the growth of private capital, participants pushed back against any narrative that public markets are becoming obsolete. For large-scale, steady-growth businesses, public markets continue to offer unmatched liquidity and price discovery. Several participants noted that recent public equity performance has been strong enough to pull capital back toward public allocationsand reduce appetite for illiquid alternatives. The dearth of IPOs was raised as a structural concern, with several tables noting that making public listings more attractive, by reducing regulatory burden and improving analyst coverage, could support a renaissance of public market participation.
There is growing pressure in many countries, both regulatory and political — to prioritize domestic investments over global opportunities. Such “home bias” is a factor that may create unintended consequences that detract from long-term valuecreation. How do these pressures create market inefficiencies, and how can market participants create value despite them?
Taken together, these shifts underscore the fact that long-term value creation depends, as it always has, on an organization’s ability to make disciplined decisions in an environment defined by competing time horizons.
As global leaders, you must balance these near-term pressures with long-term goals, identify which trends are structural and which are cyclical, and build strategies resilient to whatever changes may arise. The organizations that thrive will be those that approach decision-making with a clear focus on long-term success and with a dynamic approach to the forces of today.
Across all groups, participants acknowledged feeling pressure to invest more domestically, but drew a consistent distinction between political rhetoric and actual capital reallocation, specifically regarding reducing investments in U.S.-based assets. Pressure is most acute for large national pension funds, which face direct government outreach and expectations to support domestic economies. This creates particular tension for funds anchored in regions that are not economically or industrially diversified.
The consensus was that capital continues to flow to the best opportunities, with political pressure operating at the margins rather than fundamentally redirecting global allocation. Private capital, in particular, has a long track record of finding its way around the sharp edges of politics.
The importance of preserving investment mandate clarity when political or stakeholder pressure mounts was emphasized in several discussion groups.Participants argued that conflating a pension fund’s fiduciary duty with a sovereign wealth fund’s national development mandate can lead to misallocation of capital and weaker long-term outcomes. The guidance from multiple groups was direct: if a government wants domestically oriented investment, it should create a separate vehicle for that purpose rather than distort the mandate of an existing institution. When home bias mandates are pursued, participants stressed the importance of clear objectives tied to specific outcomes, such as housing construction or regional infrastructure, rather than vague patriotic directives. Without that clarity, the risk of misallocation compounds.
Participants were not uniformly opposed to home bias as a concept but insisted that any domestic mandate must be pursued with eyes open to its costs.
Unintended consequences are the rule rather than the exception, including reduced diversification, lower risk-adjusted returns, and the accumulation of capital in markets too small to absorb it efficiently. That said, some trade-offs were viewedas acceptable, particularly in strategic sectors such as defense or regional infrastructure, where the case for domestic investment goes beyond financial return.
Europe was cited as a context where greater regional focus, rather than purely domestic allocation, could be both strategically sound and financially viable, offering more scale and diversity than a single-country mandate while reducing overexposure to U.S. markets. Asian and Middle Eastern markets, by contrast, areless capable of absorbing large pools of domestic capital and must diversify internationally by necessity.
Rather than viewing geopolitical pressure as a mandate to reallocate, participants largely framed it as a new category of risk requiring new tools, skills, and analytical capacity. Among the concerns raised was the prospect of capital controls or restrictions on foreign investors exiting private market positions in the U.S. Geopolitical risk is increasingly being embedded at the underwriting stage, alongside traditional factors such as valuation, governance, and liquidity. The challenge is separating sentiment from real fundamentals.
As one participant noted, the pressure to avoid certain markets is often driven by anxiety rather than a rigorous assessment of whether the risk-reward profile has actually changed. Currency exposure, particularly for non-U.S. investors holdingdollar-denominated assets, was cited as a larger factor than geopolitical risk itself.
Multiple groups highlighted the challenge of making long-term capital commitments in an environment where policy directives shift rapidly and often reverse entirely. One participant was unambiguous: “Tax incentives are always reversed.” Investors in U.S. renewables were cited as a concrete example of capital caught between administrations, having shaped long-term positions around a policy environment that changed sharply. This creates a particular problem for capital-intensive industries with long payback periods. The practical implication is that companies should stress-test investments against scenarios in which policy support is withdrawn and should not use current directives as the basis for long-term capital allocation decisions.
As a result, participants noted a significant increase in the time and resources devoted to government relations, policy advocacy, and stakeholder management. This is no longer a peripheral activity but an integral part of operating in a politicized investment environment. Some viewed this as a genuine opportunity, particularly where constructive dialogue between capital allocators and policymakers produces better-designed frameworks.
The prior model of global capital allocation, in which the cheapest or most productive location wins, is giving way to a framework that weights resilience and redundancy more heavily. This shift was most pronounced in discussions of semiconductors, where participants noted that 40 years of globalization produced extraordinary innovation and cost reduction but left critical supply chains dangerously concentrated in Taiwan and China. Reversing that concentration in a single political cycle is viewed as unrealistic, expensive, and likely to be borne primarily by consumers. The practical response for companies is to build optionality, maintain a portfolio approach across geographies, and avoid betting on a single geopolitical outcome.
Participants observed that the category of assets treated as sovereign necessities has expanded significantly in recent years. Semiconductors, critical minerals, anddata infrastructure are increasingly viewed through the same lens as physical security. Every country that lacks scale cannot realistically achieve self-sufficiency across all strategic sectors, and most will need to make hard choices about where to specialize. Only the U.S. and China are large enough to cover the full range.
Despite the political headwinds, participants pointed to structural forces that continue to drive cross-border capital flows. Gulf sovereign wealth funds, multi-family offices, and the broader growth of global wealth management were cited as engines of internationalization that operate largely independent of political rhetoric.The U.S. remains a primary destination for capital and innovation, and its gravitational pull on global investment is unlikely to diminish regardless of near-term policy noise. Multinational companies are responding not by withdrawing from global supply chains but by broadening them, ensuring that stakeholders are distributed across enough geographies and functions that no single political disruption becomes decisive.
Thank you to all of the participants of FCLT Summit 2026 whose expertise and willingness to engage in open dialogue made these discussions possible. The insights reflected here are the result of thoughtful peer-to-peer exchange among leaders committed to strengthening long-term value creation across global capital markets. By sharing perspectives, challenging assumptions, and exploring practical solutions together, we continue to advance the collective mission of mobilizing companies and investors to focus capital on the long term to create lasting value.
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