Board of Changemakers at FII8: Navigating a New Financial Era

On October 29, 2024, the Future Investment Initiative (FII) hosted the “Board of Changemakers: Banking & Investment” panel at its 8th edition conference in Riyadh, Saudi Arabia.

Moderated by CNBC anchor Sara Eisen, the panel featured global financial leaders—including HSG’s Founding & Managing Partner Neil Shen—discussing the global economic outlook, capital markets, public-private convergence, AI, and regional opportunities.

Speakers included H.E. Dr. Muhammad Al Jasser (Chairman, Islamic Development Bank Group), Tony O. Elumelu (Chairman, UBA Group; Founder, Tony Elumelu Foundation), Jane Fraser (CEO, Citigroup), Ron O’Hanley (Chairman & CEO, State Street Corporation), Ted Pick (CEO, Morgan Stanley), Marc Rowan (Co-Founder & CEO, Apollo Global Management), Harvey M. Schwartz (CEO, Carlyle), Neil Shen (Founding & Managing Partner, HSG), David Solomon (Chairman & CEO, Goldman Sachs), Makoto Takashima (Chairman of the Board, Sumitomo Mitsui Banking Corp.), Bill Winters (Group CEO, Standard Chartered Bank), and Jenny Johnson (President & CEO, Franklin Templeton).

Below are key takeaways from the conversation.

Global Outlook: Resilient But Uneven

Despite forecasts of a global recession, much of the global economy has proven resilient. The U.S. remains a standout, driven by strong consumer spending, robust labor markets, and tailwinds from large-scale stimulus. Citigroup’s Jane Fraser emphasized that affluent consumers are still spending, though lower-income groups are feeling pressure. HSG’s Neil Shen echoed this cautiously optimistic tone, noting Asia’s momentum—China is stabilizing with new policy support, India and Indonesia are outperforming, and Japan is experiencing signs of a post-deflation revival.

Still, the panel noted persistent inflation, structural debt risks, and geopolitical instability. Goldman Sachs CEO David Solomon warned that inflation is “more embedded” than many investors assume. Marc Rowan of Apollo pointed to enormous fiscal expansion—much of it still to be deployed—as a force that could keep inflation elevated. Meanwhile, global debt now approaches 93% of GDP, raising long-term concerns.

Makoto Takashima of Sumitomo Mitsui highlighted Japan’s shifting economic environment, with 2% inflation, wage increases, and rising investment signaling a potential break from decades of stagnation. At the same time, he warned that political pressures for fiscal expansion risk aggravating already-high government debt levels. Ron O’Hanley of State Street noted that while the global economy has avoided a downturn, growth remains lopsided, and structural headwinds will continue to weigh on less dynamic regions.

Capital Markets and Investment: Cautious Optimism for 2025

Despite the uneven macro picture, there was optimism about the capital markets and investment activity.

After a difficult period for IPOs and M&A, activity is rebounding, and the panel expects this trend to continue. David Solomon shared data from Goldman Sachs: mergers & acquisitions (M&A) volumes and equity capital raising in 2024 remained below their 10-year averages (M&A about 13% under, equity issuance ~24% under), but that’s an improvement from the even deeper trough in 2023. “It’s improving, but there’s no reason we shouldn’t get back to or above historical averages,” Solomon said, noting that robust market capitalization growth in recent years should eventually translate into more deals. He predicted 2025 and 2026 will see more “robust” capital markets activity as confidence returns.

Ted Pick said the “sugar high” of zero-rate-driven IPOs had created unrealistic expectations. What’s emerging now is a healthier environment: stronger companies, better fundamentals, and more normalized capital markets. Neil Shen noted that many Asian markets, including the Kingdom, are seeing encouraging signs of re-equitization and investor confidence, particularly in sectors aligned with long-term innovation and infrastructure.

Jane Fraser and Jenny Johnson stressed that investors are becoming more discerning, so while financing is available, competition for capital is high.

The consensus was that sentiment has improved from a year ago: credit stress has been contained, and markets have largely adjusted to higher interest rates. If inflation continues to moderate and no major shocks hit, 2025 could see a welcome rebound in capital raising and deal activity, which in turn would benefit wealth management and investment businesses across the board.

Public and Private Capital Converge

The panel highlighted growing convergence between traditional banks and alternative asset managers, and how this is reshaping the financial landscape.

Jane Fraser described Citi’s partnership with Apollo as a “win-win,” offering clients tailored solutions across both public and private markets. Rowan predicted that distinctions between public and private credit will blur, especially in the investment-grade space.

Jenny Johnson of Franklin Templeton described a cyclical relationship between public and private markets, with some public companies going private to restructure or invest away from quarterly earnings pressures—then returning to the public market when ready. Harvey Schwartz of Carlyle emphasized that capital—like water— “finds its most efficient path.” Private markets, he said, are increasingly helping to finance deals where regulatory or market constraints make bank lending more difficult.

While private credit has grown rapidly, panelists agreed it is more resilient to shocks—thanks to lower leverage and limited interconnectivity. Still, smart underwriting remains essential.

The panel noted that collaboration is increasingly overtaking competition between banks and alternative asset managers. Banks bring customer relationships, deposit funding, and regulatory advantages in certain areas; private funds offer agility, differentiated risk appetite, and greater structural flexibility. Together, they can finance deals that might be difficult to execute alone.

As Mark Rowan summarized, private capital is just “one piece of the puzzle” – an important and growing piece, but ultimately part of an interconnected financial ecosystem alongside banks and public markets. In this “new financial era,” established banks and upstart asset managers will increasingly work hand-in-hand, each adapting to play to their strengths.

Technology and AI: Transformative Potential and Challenges

Technology—particularly artificial intelligence (AI)—was a focal point of the discussion, seen by many panelists as a defining force for the next chapter of financial services. While its potential is vast, they agreed that realizing it will require patience, strategic investment, and thoughtful execution.

Jenny Johnson noted that the first phase of the AI boom rewarded the “picks and shovels” – e.g., chipmakers like NVIDIA and cloud providers – which saw their earnings soar as demand for AI infrastructure exploded. Now comes the challenging but exciting part: applying AI to real business tasks to boost productivity. At Franklin Templeton, RFPs that once took 18 hours can now be drafted in 15 minutes using generative AI—a clear example of AI acting as a “really smart intern” to streamline workflows. Over time, such efficiency gains could be massive.

Other speakers echoed the optimism on AI’s long-run impact. David Solomon framed it as an acceleration of trends already underway: “40 years ago, comparing stocks took hours in a library – now it’s instantaneous. AI is a further acceleration of that.” He expects big productivity boosts, especially in knowledge-driven fields like finance. However, Solomon and others cautioned that capturing AI’s benefits isn’t as simple as installing a new software. “It’s very easy to create tools that make people more productive; it’s much harder to fundamentally change your operating processes,” he noted. Truly integrating AI may require rethinking workflows, retraining staff, and patiently iterating – a long-term endeavor.

From a venture capital perspective, Neil Shen offered a view on AI’s potential to reshape financial firms themselves. Shen suggested that in the future, every professional could have an AI “agent” – essentially an intelligent assistant – and collectively these agents can capture an organization’s institutional knowledge.

In finance (or VC), much expertise resides in individuals’ heads; when they retire or move on, that wisdom dissipates. But if AI systems learn from all employees and past decisions, a firm can for the first time retain a “collective memory” and even pass it down to the next generation.

In Shen’s words, it’s an opportunity for a financial services company to “transition its wisdom from one generation to the next” – potentially making organizations much more enduring and adaptive.

Shen said he is already applying AI at HSG, which has a trove of data on thousands of startups the firm has evaluated or funded. By analyzing patterns in what led some companies to succeed (becoming unicorns) and others to fail, AI could help identify promising investments more systematically. Shen acknowledged this is still the early days, but he sees it as a game-changer for venture investing: “There’s a lot of pattern recognition we can do using generative AI as the core.”

From a macro view, panelists agreed that AI will be a long-term tailwind for growth, but implementation is key. As one AI-generated interjection noted, 85% of AI initiatives fail to deliver on their promise—highlighting the gap between ambition and execution.

Emerging Markets and New Growth Engines: Asia, Middle East, Africa

Beyond the U.S., speakers highlighted opportunities in Asia, the Gulf, and Africa.

Neil Shen of HSG shared a confident outlook on Asia’s trajectory. By the mid-2024, he noted, momentum was building across key markets. In China, recent fiscal and monetary policies were beginning to have a positive effect, with renewed activity and stronger signals of recovery. While the era of ultra-high growth may be behind, Shen emphasized that China remains one of the world’s largest and most dynamic consumer markets—and a hub of innovation. “Every multinational still wants to be in China,” he said.

He encouraged a long-term view, noting that like any major economy, China experiences cycles. Recent years have brought regulatory recalibration and pandemic-related challenges, but Shen pointed to China’s entrepreneurial depth and growing technological sophistication as enduring strengths. For investors and companies taking a strategic, patient approach, he sees China—and Asia more broadly—as a vital engine of global growth in the years ahead.

Shen also cited India and Indonesia as among the fastest-growing large economies. And Japan, as Makoto Takashima highlighted, is showing new signs of life after decades of stagnation: “Inflation around 2% is back, wages are rising, and we may finally be seeing the end of deflation in Japan,” he said.

Takashima noted a shift in Japanese corporate culture. Governance reforms and investor pressure have prompted firms to restructure, divest non-core assets, and pursue higher returns. This has unleashed a wave of corporate actions (M&A, spinoffs, buybacks) in Tokyo that is creating value. He also noted Japanese households are slowly moving their vast savings into investments (helped by tax-free investment accounts that quadrupled participation this year), which bodes well for the local capital market.

The Middle East and Gulf Cooperation Council (GCC) countries were cited as another bright spot. H.E. Dr. Muhammad Al Jasser noted that the GCC economies—led by Saudi Arabia and the UAE—have become increasingly stable and diversified. “Predictable monetary policy and counter-cyclical fiscal policy” in Saudi Arabia, he said, have strengthened resilience and fueled long-term growth.

He added that the region deserves a new chapter defined by commerce, industry, and development: “It’s about time this region gets a chance to do what it does best.”

Tony Elumelu, one of Africa’s leading investors and philanthropists, emphasized the continent’s demographic momentum: a population of 1.5 billion today is expected to nearly double by 2050, with a median age of just 19. “By 2050, one in every three young people in the world will be African,” he noted.

Elumelu focused on the importance of unlocking economic opportunity for youth, with infrastructure—especially electricity—key to enabling industrialization. “Without electricity, Africa cannot industrialize. Without industrialization, jobs won’t be created,” he said. He urged global investors to mobilize long-term capital into energy and infrastructure, positioning Africa as a rising driver of global growth.

Bill Winters offered a perspective on Europe’s role in the global economy. While growth has been more modest than in other regions, European companies remain highly active abroad—particularly in Asia and Africa—where many generate a large share of their growth. Winters expressed long-term optimism, citing Europe’s capacity for reinvention and the potential for pro-business reforms. In the near term, demographic trends, energy costs, and political complexity may present headwinds. Still, with multiple regions powering ahead, he described the broader global outlook as encouraging: “The global economy is in really good shape – multiple engines are powering ahead.”

In summary, the panel’s regional perspectives reinforced a central theme: the future of finance will be increasingly global and multipolar. Asia offers scale and innovation, the Middle East brings stability and investment ambition, and Africa holds vast demographic potential. Financial leaders who take a long-term, context-aware approach will be best positioned to navigate these dynamic markets and unlock the next wave of global growth.

Closing Thoughts: Embracing Change Amid Challenges

The panel ended on a forward-looking note. “Resiliency—both emotional and practical—will be critical,” said Jane Fraser, capturing the consensus that adaptability, collaboration, and long-term thinking will define the next era of financial leadership.

The panelists agreed that the financial industry is entering a new era—one shaped by those who can adapt and innovate amid rising geopolitical tensions, shifting global alignments, and the complex realities of decarbonization. Several speakers noted that the era of near-zero interest rates is over. As Ted Pick put it, the world has moved beyond “financial repression” and into a more volatile landscape where capital has a real cost. With elevated debt levels and ongoing uncertainty, governments and institutions alike will need to navigate carefully.

The tone, however, was not pessimistic. Fraser stressed the importance of engagement—arguing that in a fragmented world, dialogue between business and government is more essential than ever. Ron O’Hanley noted that addressing climate change will require major investment but could also spark innovation and growth. Makoto Takashima added that even high public debt is manageable with smart policy, fiscal discipline, and long-term growth strategies.

The discussion closed on a note of determination and optimism. Panelists from across sectors and regions agreed that through innovation and collaboration, the industry can navigate whatever lies ahead. The challenges are real—but solvable if leaders act boldly and work together. Success in this era, they noted, will favor the agile: those who embrace change while staying grounded in long-term thinking and sound risk management.

Watch the full panel discussion below.