The 'HALO' trade shifts focus to heavy assets
The bullish case for the 'HALO' (Hard Assets, Low Obsolescence) trade is that the AI boom is driving private equity to pivot toward heavy industrial assets that are insulated from technological disruption.
The argument
The hosts discussed how major private capital firms like Blackstone, Bain, and Brookfield are shifting priorities toward physical infrastructure, ship engines, and conveyor belts. These assets are viewed as having low obsolescence risk because they cannot be easily replaced or made extinct by artificial intelligence.
The thesis, stress-tested
✓ What validates it
- ✓Blackstone or Brookfield announcing multi-billion dollar acquisitions of industrial or logistics businesses
- ✓Increased capital allocation to infrastructure-focused private equity funds
▸ Risks discussed
- ▸Overvaluation of industrial assets as capital floods into the HALO trade
- ▸Economic slowdowns reducing demand for heavy machinery and physical infrastructure
Hear it yourself
"Blackstone, Bain, and Brookfield have all been talking of an increased focus on heavy assets with low obsolescence. This so called halo trade is targeting makers of everything from ship engines to conveyor belts that are considered less likely to be made extinct by AI."
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