Australian investment funds are increasingly looking beyond artificial intelligence for opportunities, with concerns mounting over technology companies’ reliance on credit markets to fund expansion. Jacob Mitchell, chief investment officer at Antipodes, cautioned that the market has “reached the more difficult part of the AI cycle,” as tech giants spend more cash on infrastructure than their businesses generate, necessitating heavy borrowing. Antipodes, a hedge fund manager, consequently favours established software providers, viewing them as a “safe way” for corporates to integrate AI following earlier misplaced fears about AI disruption.
Beyond technology, Mr Mitchell also identified ageing demographics in the United States as a compelling investment theme, singling out senior housing provider Brookdale. He noted the oldest Baby Boomers are turning 80, with high interest rates making new housing development expensive. This scarcity positions existing properties as valuable investments, with lower rents than new construction costs, offering inflation protection. Meanwhile, Tommy Lam, senior portfolio manager at UniSuper, which manages $180 billion in assets, advocated balancing tech exposures with global defence. Mr Lam warned that while AI is popular, it “may not work,” pointing to defence as a major growth area driven by rising geopolitical tensions.
Cameron Robertson, a portfolio manager for Platinum Asia Strategy, part of L1 Group, observed that the market’s intense AI focus has suppressed valuations of other Asian companies, creating rare entry points. He cited Indian private healthcare group Yatharth Hospitals, trading at multi-year valuation lows despite strong structural tailwinds. He highlighted India’s per capita healthcare spending of approximately $US85 annually versus Australia’s $US7000, indicating vast growth potential. Similarly, Indonesian conglomerate Astra International, exposed to long-term growth, trades at just five times earnings with an 8 per cent dividend yield, undervalued given the country’s economic development prospects.
