Finally, a rapidly aging population in many parts of the world could mean growing demand for goods and services that a shrinking workforce will struggle to meet. Third, the energy transition is likely to mean energy prices remaining on a steady upward trajectory. The imperatives of energy security and environmental sustainability are driving in the same direction – to reduce dependence on imported fossil fuels and switch to renewable energy. In the short to medium term, this transition to cleaner energy is likely to be inflationary. The Bank of England estimates that inflation will increase by nearly 0.6 percentage points in the 2020s in an orderly transition scenario and by as much as 2 percentage points by the early 2030s in a disorderly scenario. With the ongoing energy crisis. we are probably seeing a preview of a disorderly transition. And it is not just energy prices. Demand will surge for minerals such as copper, aluminium, cobalt, lithium, nickel, and rare earths, which are critical to various clean energy technologies, including wind turbines and electric vehicles. This could lead to what some analysts have referred to as greenflation, or rising prices for those metals and minerals that are essential to renewable energy and technology. Fourth, climate change could disrupt agriculture, driving food prices higher. Extreme weather conditions are becoming more frequent worldwide. Just this year, China and Europe have experienced one of their worst droughts on record, and Pakistan and India have seen devastating floods.

Bright spots exist but they are more segmented and there is a need to seek them out more carefully. This environment presents an opportunity for private capital to shine. Private equity (PE) and venture capital (VC) managers are more nimble than investors in public markets. They can focus on investment themes in differentiated market segments and high growth markets to add diversification and enhance portfolio resilience. Let me suggest three pivots for private market investment strategies in the uncertain environment ahead. one, pivot from growth to sustained profitability; two, pivot to South and Southeast Asia as key growth markets; three, pivot to private credit as a new avenue for capital;  PE/VC managers are increasingly prioritising profitability over growth. More managers are rightly focused on selecting companies with strong balance sheets, low burn rates, and good prospects for profitability in an environment of lower growth, higher inflation and higher interest rates. As these shifts are being made to strengthen resilience, the industry can also position itself for more sustainable growth. Compared to public equity investment managers, PE/ VC managers typically have more control and influence over their portfolio companies, and greater access to information on their financial and sustainability performance. South and Southeast Asia are becoming one of the most important regions for private market investment opportunities. Last year, growth in PE/VC investments in India outpaced most major economies, including China. India and ASEAN together accounted for almost 30% of the record $ billion of private equity investments that poured into the Asia-Pacific region last year.