Single family office Valkin Group eyes future tech for long-term gains
The next decade of technology enhancements are going to be increasingly exciting, and the future looks incredibly promising for long-term investors, according to single family office Valkin Group.
“Artificial intelligence is going to change the world, and the next five years will be transformative [because of] this technology. However, the 2030s will be shaped by quantum computing, nanotechnology, and healthcare advancements," said Vishal Harishchandra Kewalramani, owner of Valkin Group.
"As a long-term investor, this is what is exciting for us,” Kewalramani told AsianInvestor.
Valkin Group operates across Singapore, Hong Kong, New York, and London.
Kewalramani is also enthused by the speed at which these technologies will change the world, the exponential impact they will have on global GDP, and what that means for a long-term investor.
“The first industrial revolution lasted about 60 to 80 years. We might see similar levels of change within just eight to ten years this time,” he noted.
According to PwC, AI could contribute up to $15.7 trillion to the global economy by 2030, driven by productivity improvements and consumer demand enhancements. This could result in a 26% increase in GDP for local economies.
AN OPPORTUNE TIME
Various estimates suggest that overall investments via private equity and venture capital in technology remain soft in 2024. Kewalramani finds this a good opportunity to enter the market.
“Currently, the markets are in trouble, which tends to eliminate the so-called tourist investors: those who are only here because it’s fashionable. Serious investors, on the other hand, always know that down markets present the best opportunities to invest,” he said.
The family office is active in both the venture debt and private equity space.
It looks to provide growth capital versus mergers and acquisitions (M&A) capital, to entrepreneurs and young growing companies, with an equity kicker in the company to align the family office’s interests with the founders.
ALSO READ: Valkin family office targets venture debt plays
Kewalramani, however, cautioned against getting too carried away with the latest buzzing trends.
“While investing, stick to your area of expertise. If you've made your money or have expertise in hospitality, continue in that field rather than venturing into unfamiliar areas like biotech,” he noted.
Valkin Group focuses on enhancing efficiency in the global supply chain and consumer goods sectors by investing in future technologies in these domains, as these are the core areas of its underlying business and expertise.
It also looks at the needs and pain points its customers have in its underlying business, so as to decide where to invest, rather than being overly concerned with competition or macroeconomics.
“Learning from industry leaders is crucial and knowing what competitors are doing is good, but ultimately, our customers' preferences guide our investment direction,” noted Kewalramani.
AI IN SUPPLY CHAIN
AI has the potential to revolutionise supply chain operations by improving decision-making and efficiency. According to McKinsey estimates, AI-enabled supply chain management can reduce logistics costs by approximately 15%, inventory levels by 20%, and improve service levels by 40%.
The adoption rate of AI in supply chain operations is projected to grow by 45% by 2025. The market for AI in the supply chain is expected to reach $41.2 billion by 2030, growing at a CAGR of 38.8%.
ALSO READ: Family office founder: ‘Be wary of cocktail conversations that turn into strategy’
Within the global supply chain, the family office is concentrating on electric vehicles, batteries, solar panels, and consumer goods — with consumer goods being the biggest area of focus. The consumer goods supply chain encompasses all the necessary steps and actions to effectively bring consumer products from production to market. It covers everything from sourcing raw materials and manufacturing to packaging, distribution, and retailing.
“The consumer goods supply chain alone is about $4 to $5 trillion, which is substantial enough for our investment focus,” shared Kewalramani.
Regarding the possibilities of AI impact, Kewalramani felt it's still early days.
ALSO READ: Family office scouts for opportunities leveraging AI tech
“Right now, AI can help with research and output, but can't take action. The next leap will be actionable AI: one that can book flights, call a car, or make a restaurant reservation. That phase is coming, but we’re still maybe two years away,” he noted.
“But in around two years, we will start seeing significant changes. And with change comes opportunity,” he added.