“It is time to be patriotic about Europe and defend our economic and social model. You can invest in crypto assets or structured products, but that contributes nothing to the real economy. Financing European companies, injecting them with the capital they need to build resilience and sovereignty, is something European investors should actively embrace.”
These are the words of Thomas Friedberger, Deputy CEO and Co-CIO of Tikehau Capital. During a recent visit to Madrid, Friedberger detailed Tikehau’s commitment to long-term investment themes in European assets across public and private strategies. He outlined a macroeconomic landscape where the primary engines driving growth over recent years are handing over the baton to brand-new dynamics.
In recent times, we have had to live with higher levels of volatility and uncertainty. What is your core macroeconomic scenario?
Our conviction since the end of the COVID crisis is that we are entering a world of lower growth because future growth will be far less optimized. For years, there was tremendous visibility surrounding globalization and the trajectory of interest rates, which allowed companies to optimize numerous operational facets—from capital structures to supply chains. However, that optimization turned into a vulnerability during COVID and subsequent geopolitical tensions.
What the world needs now is to build resilience rather than efficiency, and that comes at a cost. Resilience requires heavy capital expenditures (capex), maintaining larger inventories, operating with higher capital buffers, and purchasing hedges against climate and cyber risks. Consequently, I believe corporate profit margins will face ongoing pressure on both revenue and cost fronts.
Furthermore, this lower growth will be accompanied by higher inflation. Deglobalization is inherently inflationary because those heavy capital investments are partially financed through public debt and massive fiscal expansion. Moreover, while artificial intelligence was expected to exert deflationary pressures, it is currently proving to be inflationary: it is driving up prices for semiconductors and electricity. Shifts in Asian currencies also play a role—for years, weak currencies contained global inflation, but the renminbi’s appreciation could generate renewed inflationary pressure. My point is that it is not just the energy crisis driving inflation. The last time we saw a setup like this was in the 1970s.
How can investors fortify their portfolios to navigate these risks?
In a world where interest rates no longer fulfill their traditional role of shielding investors, risk assets face mounting pressure. It is a very complex environment because investors have virtually nowhere to hide. Historical market leaders argued that the only way to navigate such a scenario was to invest with a sufficient margin of safety to absorb potential hits to operational earnings from lower growth and higher inflation.
Yet, if you look at market behavior today, you see the exact opposite. Capital is flowing into assets at sky-high valuations—not just in AI, but also in fixed income, where credit spreads in certain segments are extremely tight. At Tikehau Capital, we remain committed to maintaining strict discipline and avoiding FOMO, even when challenging. Because we co-invest our own balance sheet capital alongside our shareholders and LPs, we are the first to feel the impact of investment missteps. This is why we are deploying capital with extreme prudence, particularly in private credit.
Are you conscious that your stance sounds extremely contrarian?
Yes, but that does not concern me. If the broader market simply follows the crowd, I am comfortable being a contrarian. We believe growth will persist, but it will be far more concentrated than before. Previously, growth was consumption-driven; moving forward, it will be driven by capital expenditure as the imperative shifts toward building resilience.
When growth relies on consumption, nearly every sector benefits. When it depends on capex, only the specific sectors receiving those capital infusions stand to win. The ultimate winners in this environment are the four ‘Ds’: defense, deglobalization, digitalization, and decarbonization. That is precisely why we concentrate our private equity investments on those sectors and the solution providers enabling them.
What happens then to economies like the United States, where consumption accounts for nearly 70% of GDP?
The United States remains heavily reliant on consumption, driven largely by the wealth effect generated by AI. Currently, consumer spending is no longer backed by wage growth; roughly 1.5% of US GDP is tied directly to AI investments, and another 1.5% stems from the wealth effect of retail investors purchasing shares in Nvidia and similar mega-caps. In short, the economy is deeply dependent on artificial intelligence—if this AI investment cycle pauses, major vulnerabilities will emerge.
Another critical factor: over the past decade, high visibility favored asset-light business models designed to return massive amounts of cash to shareholders. Today, the dynamic has reversed; companies require heavy liquidity to fund capex programs. We have seen Google execute the largest debt offering in its history, and SpaceX prepare a massive bond issuance shortly after its public market moves. Ultimately, this capital investment cycle is being funded by leverage. In fact, hyperscalers are currently among the largest issuers in the Investment Grade bond market.
How are you approaching AI as an investment theme?
We are keenly interested in artificial intelligence, but we approach it through a contrarian lens. We focus on financing data centers and the broader electrification value chain—such as companies improving power grid efficiency and end-user electrification—rather than investing directly in AI pure-plays at demanding valuations.
The niche opportunity we have identified centers on funding the early construction phase of data centers: facilities that have already secured power supply and municipal permits. We take on the construction and commercialization risk to capture double-digit returns. We favor this strategy because once constructed and leased, traditional banks move aggressively to refinance the asset. This shortens the investment duration, yielding equity-like returns far faster than usual.
Conversely, we remain hesitant to maintain long-term equity ownership of data centers, as we believe the market severely underestimates the risk of technological obsolescence.
What other long-term investment themes are you developing at Tikehau?
Closely tied to artificial intelligence is decarbonization. I firmly believe that decarbonization is the greatest investment opportunity of our generation.
Looking at IPCC data, achieving Paris Agreement goals requires a collective global investment of roughly $6 trillion annually in decarbonization. 80% of that capital must target transforming existing systems—industry, agriculture, buildings, and transportation—while only 20% should go toward speculative early-stage tech venture capital. The core imperative is transforming legacy infrastructure.
Over the last 12 years, we have built deep expertise investing in electrification solution providers. The only way forward is to electrify the end consumer, which is impossible without a dramatically more efficient power grid. These are low-tech-intensity businesses, yet they are highly profitable and scaling rapidly. We currently manage the largest European private equity fund dedicated to electrification.
Why do you view decarbonization as the most attractive long-term investment opportunity?
Prior to recent geopolitical tensions, decarbonization was viewed as desirable, but carried the stigma that extra-financial returns came at the expense of financial performance. Today, that narrative has completely flipped: geopolitical crises have proved that decarbonization is fundamental to strategic sovereignty.
In Europe, this means breaking reliance on foreign fossil fuels. In China, it reduces dependence on the US dollar for crude oil purchases. Furthermore, if the United States wants to preserve its global leadership in artificial intelligence, it must aggressively decarbonize its energy grid, as scaling emission-free power generation is the only way to solve current electricity bottlenecks.
Yet that appears to clash with political messaging in certain regions…
In practice, Texas is already the largest producer of renewable energy in the United States. Between 2024 and 2025, 94% of new utility-scale power capacity installed across the country was renewable energy. The structural momentum is already underway.
The consequence is that Europe finds itself leading a global movement for once, buoyed by stringent regulatory standards. European solution providers in decarbonization—companies specializing in energy efficiency, resilient supply chains, and industrial processes—have matured rapidly. These are the exact companies Tikehau Capital has backed for over a decade, and we are witnessing their rapid international expansion. This reinforces my conviction: decarbonization is the single greatest investment opportunity of our generation.
