Global Wealth Planning

Five Forces Shaping Wealth In 2026

The downturn many investors feared at the start of 2026 has not arrived. Global growth has held up, trade is still expanding and equity markets remain supportive. Yet the year has become harder to read. Governments are borrowing more, long-term yields have climbed, Europe is spending heavily on defence and infrastructure, AI is absorbing capital across several asset classes and private markets are still struggling to return enough cash to investors. The common thread is the price and availability of capital.

Worth To Remember

  • Global growth has been stronger than feared, but long-term capital has become more expensive. Thirty-year government yields in six G7 economies are at their highest in at least 15 years, while the IMF expects global public debt to reach 100 percent of GDP by 2029.

  • Trade has rerouted rather than retreated. The WTO’s goods barometer stood at 102.0 in September, above trend and higher than in June, helped by strong demand for AI-related components.

  • Europe is trying to finance defence, infrastructure and energy security while its economy grows by less than 1 percent and inflation has returned to 3 percent.

  • AI has moved from a technology theme to a financing cycle. Its build-out supports growth and trade, but high valuations, greater leverage and heavy capital expenditure leave little room for disappointing returns.

  • Private equity is still putting money to work, but exits remain scarce. That raises the value of liquidity for families already committed to long-dated assets.

At the beginning of 2026, the obvious risks were easy to list: tariffs, public debt, geopolitical conflict, weak European growth and expensive technology shares. Nine months later, several of those concerns have proved correct without producing the downturn many expected.

The OECD now expects the global economy to grow by 2.9 percent this year. Growth slowed sharply in the first half, but the Middle East energy shock did less damage than initially feared as countries released inventories, found alternative supplies and used fiscal support. Spending on artificial intelligence supported investment, manufacturing and trade. Growth held up, but governments, companies and investors are now financing themselves at higher rates.

01 Public Debt Is Repricing Capital

Source: International Monetary Fund

Global public debt reached just under 94 percent of GDP in 2025, and the IMF now expects it to reach 100 percent by 2029, one year earlier than it forecast last year. Defence spending, social commitments, strategic industrial policy and higher interest bills are adding to the burden. The Middle East conflict has introduced another cost through energy subsidies, fiscal support and weaker public finances in exposed economies.

The OECD reports that long-term government yields in many economies have risen to their highest levels in 15 years or more. Thirty-year yields are at such levels in six of the G7 economies. Fiscal concerns explain part of the increase, while unusually heavy bond issuance by technology companies adds another source of demand for long-dated funding.

Higher sovereign yields feed into mortgages, corporate borrowing, private credit and property finance, while also raising the return investors demand from private funds and equities; after a decade of cheap money, the question in 2026 is no longer where to deploy more capital, but what an investment offers above the return already available from liquid assets.

What to watch through year-end: long-dated sovereign yields, not just policy rates. Higher refinancing costs leave companies and property owners with less cash and lower the price investors are willing to pay for their assets.

02 Companies Are Redrawing Global Supply Chains

Source: World Trade Organization

Tariffs have not produced the simple retreat from globalisation many expected. The WTO’s Goods Trade Barometer reached 102.0 in September, up from 101.7 in June and above the 100 level associated with trend growth. Electronic components recorded the strongest reading, helped by demand linked to AI investment. Global merchandise trade has remained firmer than the political backdrop suggests.

Companies have redrawn the routes through which global trade moves. They are adding suppliers, rerouting shipments, moving assembly and bringing some production closer to customers. Export restrictions and bilateral tariffs continue to disrupt supply chains, but companies are reorganising them rather than withdrawing from international trade. The OECD reports that merchandise trade recovered after the initial disruption from the Middle East conflict, helped by AI-related shipments from Asia, while non-AI trade also began to improve.

A company’s home market often says little about where its revenues, costs and financing risks come from. A French-listed business may source from Asia, sell heavily into the US and borrow in dollars; a Swiss industrial company may depend on imported components and euro-area demand. Funds carrying different regional labels can still own businesses exposed to the same suppliers, currencies and end markets.

Revenue, production, suppliers and currencies give a clearer picture of geographic risk than the exchange where a security trades. Family-owned businesses see the same exposure directly in their accounts: tariffs raise input costs, alter sourcing decisions, reduce demand or cut margins.

What to watch through year-end: non-AI exports. If they strengthen, trade growth is broadening beyond the technology cycle; if they stay weak, much of the recovery still rests on AI-related demand.

03 Europe Is Spending Before Growth Has Recovered

Sources: NATO and European Central Bank

European NATO members and Canada increased core defence expenditure by nearly 20 percent in real terms in 2025. Under the commitment agreed at The Hague, allies aim to allocate 3.5 percent of GDP to core defence and another 1.5 percent to wider defence- and security-related investment by 2035. Five allies are already expected to reach the 3.5 percent level in 2026, while 17 are expected to meet the wider 1.5 percent target.

Defence spending reaches communications, cybersecurity, logistics, ports, aerospace, manufacturing capacity and power, while energy security requires grids, generation and storage. Governments are also supporting strategic industrial capacity after years in which Europe relied more heavily on imports.

The ECB expects euro-area GDP to expand by only 0.9 percent in 2026, while inflation averages 3.0 percent and reaches 3.6 percent in the fourth quarter. Wholesale electricity prices in its September assumptions average €108.7 per MWh, more than €21 above the June assumption. In response to renewed inflation pressure, the ECB raised its three key interest rates by 25 basis points on September 10th.

Defence contractors, grid operators, engineering groups, infrastructure developers and selected industrial companies are competing for spending that barely existed at this scale a few years ago, while private capital is moving into the same sectors because heavily indebted governments cannot fund every project themselves.

Investors still need to distinguish signed orders and funded projects from political commitments that have not yet produced cash flow.

What to watch through year-end: defence and infrastructure orders, alongside energy costs. Rising orders would start feeding into company revenues, while expensive power would keep financing and operating costs high.

04 AI Costs Are Spreading Far Beyond Technology

Source: OECD

The OECD says investment in data centres and technology equipment supported second-quarter growth in the United States, Canada and Australia. Semiconductor producers such as Korea and Japan benefited from stronger exports; China did as well. AI-related goods helped global trade recover after the Middle East shock and remain one of the main reasons economic activity has held up better than expected.

Technology and cloud companies are committing more capital to AI, and the spending now reaches far beyond chips and software. Data centres require electricity, cooling, land, construction and grid capacity, bringing utilities, engineering firms, property owners and lenders into the same investment cycle. AI now creates earnings opportunities across technology and infrastructure while absorbing capital that also prices bonds, property and other assets.

The OECD also explains that current technology valuations assume rapid earnings growth and identifies electricity and advanced semiconductors as potential bottlenecks. AI companies are also relying more heavily on leverage and larger financing programmes. If returns take longer to arrive than investors expect, weaker sentiment could spread into engineering, construction, credit and broader financial markets.

Current valuations and investment plans already assume strong earnings growth, leaving little room for a shortfall.

What to watch through year-end: earnings and cash generation, not bigger capital-spending plans. Revenue growth, margins and productivity gains will show whether AI investment is producing enough return on the capital already committed.

05 Liquidity Has Become More Valuable

Source: KPMG

Global PE deal value reached about $1 trillion across 9’294 transactions in the first half of 2026. Technology, media and telecommunications attracted $354.7 billion, while energy and natural resources drew $149.2 billion and were running at a record pace.

KPMG recorded only 1’315 private-equity exits in the first half of 2026, the weakest pace in more than a decade. Fundraising reached $261.8 billion across 315 funds, below the peak years earlier in the decade.

Private funds still call capital against existing commitments, property needs refinancing, operating businesses need investment and families have taxes and distributions to meet. Slower exits mean less cash comes back from private assets just as more cash is needed elsewhere.

Cash and short-duration instruments can meet a capital call without forcing an equity sale after a decline, fund refinancing without selling another asset and give a family time to wait for better terms.

A high-net-worth family can own substantial assets and still run short of available cash when too much wealth is tied up in businesses, property and private funds. The key figure is not only net worth, but how much remains liquid when another part of the balance sheet needs money.

What to watch through year-end: distributions and exit volumes. If exits stay weak, less cash will return to investors and the liquidity squeeze will run into 2027.

What 2026 Has Shown So Far

The year’s most important development is how these five forces reinforce one another. Governments, European infrastructure programmes and technology companies investing in AI are all competing for capital at the same time, keeping financing costs high just as private-equity investors are getting less cash back. AI investment is also supporting trade, but if returns fall short of current expectations, the effects will spread into infrastructure, credit markets and investor liquidity.

A private fund now has to justify locking money away when liquid bonds already offer a meaningful return, while highly valued technology companies have less room to miss earnings expectations when expansion depends on continued funding. Families with debt in operating businesses, property and private funds can feel the same financing pressure across several parts of the balance sheet at once.

What To Pay Attention To Before 2027

Three developments will tell investors more before 2027 than another year-end forecast.

First, long-term yields. If sovereign borrowing costs stay elevated or rise further, property, credit, private equity and long-duration equities enter 2027 with a higher hurdle rate.

Second, AI returns. Investment has already proved large enough to influence global growth and trade. Earnings, productivity and cash flow now need to catch up with expenditure. Weak returns would put more pressure on valuations and make further financing harder.

Third, Europe’s energy bill. The ECB’s outlook assumes the current shock eases. Lower oil, gas and electricity prices would reduce inflation pressure and make defence and infrastructure spending easier to absorb; high energy prices would keep costs and financing pressure elevated while weakening growth.

Private wealth can look diversified on paper while still depending on the same financing conditions. Equities, property, private funds and an operating business may all be exposed to higher borrowing costs; trade restrictions can reach both listed holdings and family companies; AI exposure can sit inside an equity index, an infrastructure fund and a credit portfolio at the same time.

The question before 2027 is how much of the family’s wealth still depends on capital staying affordable and readily available.


References (APA)



You May Also Like

Wealth Does Not Stop at the Border. The Rules Do.

What a Strong CHF Does to Your Portfolio

How Global Tax Reform Is Changing Wealth Structures