DEER ISLE: Insights, Flows & Investment Trends

“AI”: 70% versus 20%!?

In what sector is close to 70% of the funds flow and corresponding intellectual energy going into AI? 

“Venture Capital”

In what sector is only approximately 20% of the intellectual energy going into AI? 

“Traditional Private Schools”

Headmaster of a “progressive” very selective NYC Private School was describing how most of his faculty feels threatened or is not interested in AI.  In fact, when he offered an AI Professional Development program only 20% of his faculty signed up for it.

If even the best and brightest Private Schools are not ready for AI, what does this mean for most of today’s students?  How will companies have workers who know how to use this powerful tool and, maybe more importantly, know how to assess information.

Capital Provider Interest: REIT looking to acquire tertiary market triple net lease single tenant buildings at 7 to 8 cap rate.  Can invest from $5 million to $100 million in any transaction.  Perhaps Private Equity can generate liquidity from their investments by doing sale/leasebacks in portfolio companies.

Private Equity: Deal flow seems to be slowly increasing but a significant portion of deals are failing to close due to unexpectedly lower performance metrics for 2024 than historical financials would indicate.  A leading indicator of economic slowdown?

Real Estate: The next frontier seems to be data centers.  Will there be enough AI capital raised to fund all the data center development that will need to take place in order to support greater and greater AI requirements?

Venture Capital: Equity holders of Series A/B companies that were funded in the last 2 to 3 years seem to be capitulating on valuations while management teams continue to hold out. If a company with strong fundamentals is willing to “reprice” to current valuations, they can get funded signaling some unfreezing of the venture market.