Institutional investors around the world are reshaping their investment strategies as three major megatrends—artificial intelligence (AI), the energy transition and deglobalization—continue to redefine the global economic landscape. According to Nuveen’s latest Global Institutional Investor Survey, these themes are having a profound impact on portfolio construction and long-term capital allocation.
The report shows that AI has become the single most influential investment theme, with 63% of institutional investors identifying it as the megatrend most likely to shape their investment decisions over the next five years. The energy transition ranks second at 40%, followed by deglobalization at 36%.
“Institutional investors are facing a defining moment shaped by three transformative megatrends: the AI revolution, the energy transition and the forces of deglobalization. These are not merely abstract concepts—they are driving real investment decisions. Institutions are investing heavily in AI infrastructure and energy production, adjusting regional exposures in response to trade disruptions and significantly increasing allocations to private markets. The common thread is that investors are taking decisive action to position portfolios for a new investment landscape,” said Harriet Steel, Global Head of Institutional Distribution at Nuveen.
Nearly every institution is investing in AI
The survey highlights an unprecedented level of institutional commitment to AI, with 96% of institutions actively investing in AI-related opportunities. In addition, 75% believe AI will generate a significant increase in economic productivity over the next decade.
Investors are allocating capital to cloud infrastructure, computing capacity and semiconductors, AI model development and software, as well as energy generation to support the technology’s rapid expansion. Among investors allocating capital to AI, 39% view energy production and infrastructure as the most attractive investment opportunity.
“Nearly every conversation we have with institutional investors includes a discussion about the many ways to position portfolios around AI. Over the past 12 months, we have seen not only broader recognition of AI’s transformative potential, but also a much more sophisticated approach to investing in it. Interest in cloud infrastructure and semiconductors remains strong, but investors are increasingly seeking more direct exposure to the energy generation and transmission assets needed to power this revolution,” Steel added.
The energy transition: from risk to opportunity
Institutional investors are also changing the way they approach energy and climate, shifting from a risk-management perspective toward an opportunity-driven investment strategy.
According to Steel, investors are increasingly seeking exposure to new forms of energy generation, particularly as energy demand continues to rise across multiple sectors globally.
“At Nuveen, this translates into tangible investment opportunities across both public and private markets—from utility companies positioned to benefit from faster earnings growth to private investments in clean energy infrastructure, energy storage and the construction of data centers that support AI growth,” she said.
One notable finding from the survey is that 64% of institutions agree that the expected surge in energy demand strengthens the investment case for clean energy. Energy innovation and infrastructure projects remain the top destination for capital among impact-focused investors.
Trade, tariffs and geopolitics reshape portfolios
Nearly all respondents (91%) made portfolio adjustments in 2025 in response to trade, tariff and geopolitical developments.
Among investors reallocating capital geographically, more than one-third (36%) increased their exposure to Europe, reflecting a strategic effort to diversify amid rising uncertainty.
Among those shifting sector allocations, the most frequently cited areas included AI-related technologies (cloud computing, machine learning and industrial automation), alternative credit and private equity, cryptocurrencies, blockchain technology and digital assets, energy (including renewables, semiconductors and utilities), cybersecurity and healthcare (biotechnology, pharmaceuticals and life sciences).
While 74% of respondents believe that 2025 has been more positive than negative for their portfolios, nearly half (44%) expect the unprecedented tariff and trade measures introduced this year to have lasting implications for investment strategy.
Looking ahead, 48% of investors expect the dominance of U.S. capital markets to diminish over the next decade.
Views on interest rates remain divided. Nearly half (47%) expect the Federal Reserve to implement gradual, steady rate cuts that would support financial markets, while 32% anticipate an uneven or unpredictable easing cycle that could increase market volatility. Another 12% expect rate cuts to be paused or delayed because of renewed inflation, while 8% foresee a faster pace of easing amid concerns over a sharper economic slowdown.
Accelerating allocations to private markets
Approximately 81% of institutional investors plan to increase their allocations to private markets over the next five years, with more than half (51%) expecting to raise those allocations by between five and fifteen percentage points.
Private infrastructure, corporate credit and private equity are the leading alternative investment priorities over the next two years. Forty-three percent of institutions plan to increase allocations to private infrastructure and corporate credit, closely followed by private equity (42%).
“The scale and pace of institutional capital flowing into private markets remain significant. Institutional investors continue to capitalize on the powerful combination of benefits offered by private markets: diversification away from public market uncertainty, enhanced income generation and the potential to improve risk-adjusted returns. As new technologies make it easier to integrate private market investments into existing portfolios, we expect this structural shift to accelerate, particularly as investors seek resilience in an environment of persistent volatility,” Steel concluded.
Although diversification remains one of the key advantages of private markets, nearly half (46%) of institutions identified diversifying their alternative credit allocations as a top priority over the next five years.
The preferred segments within private fixed income include investment-grade private companies (44%), investment-grade private infrastructure debt (44%) and private asset-backed securities (ABS) (40%).
In addition, nearly half of investors (46%) plan to add one or two new types of alternative credit investments over the next two years, while 15% expect to add three or more.
Beyond expanding diversification within private markets, investors are also looking beyond developed economies. Among those planning to increase allocations to below-investment-grade public fixed income, 48% intend to raise exposure to emerging market debt, compared with 27% a year earlier.