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HSBC Funding the Future Survey
- Near-term sentiment has deteriorated for both private and public investors
- Geopolitical risks and tariff uncertainty are key headwinds, but investors still remain positive about the longer term
- Public investors feel strongly bullish on healthcare, while private investors are optimistic on the IPO outlook
Tariffs dampen sentiment
The fourth edition of our proprietary Funding the Future Survey shows investor confidence about the near-term outlook for venture capital (VC) activity and public high-growth equities has dampened somewhat since the start of the year, amid geopolitical risk and tariff uncertainty – but they remain hopeful about the longer term.
Carried out by Survation, this survey captures the views of 184 global investors representing a significant portion of the VC and high-growth investment community. Survey participants represented total assets under management (AUM) of USD1.87 trillion with 42% (about USD780 billion) attributed to VC and private equity (PE) investors.
The fieldwork took place on 24 February to 17 March 2025 during the first couple months of the new administration in the US. The period saw numerous announcements on trade tariffs, volatility in US markets, and significant uncertainty over the future evolution of geopolitical conflicts, including in the Middle East and Ukraine.
Against this backdrop, investor sentiment about the near-term outlook has dampened. Just 47% of private market investors foresee an increase in investment activity over the next quarter, down from 53% in our previous survey. Meanwhile, 78% (down from 83%) see activity picking up over the coming year, suggesting a continued positive view about the longer term.
There has also been a shift in attitudes towards two key sectors: tech and healthcare. Fewer investors are now outright bullish on tech across both public and private markets, perhaps following a difficult few months that saw valuations coming under scrutiny and new potential trade restrictions emerging.
By contrast, public investors are now strongly bullish on healthcare – perhaps because of its qualities as a defensive, value-oriented sector. However, healthcare investors in private markets have grown more cautious on the sector, likely because of lower expectations of deal-making.
We also asked respondents for their views on:
- Key headwinds: Geopolitical risks and tariff uncertainty top the list of investor concerns, with “tariffs”, “trade”, and “protectionism” among the areas of US policy they are following closely. Other concerns include inflation, interest rates, and the risk of muted growth.
- Key tailwinds: The speed of technological change and demand for skills are among the factors investors see as supportive of private markets.
- Nine themes: Among the investment themes we track at HSBC Global Research, Disruptive Technology and Demographics were favoured by survey respondents.
- Exits & IPO Trends: Buyouts and trade sales remain the favoured exit routes for VC/PE investors, as VC/PE investors turn more bullish on the equity capital market activity outlook. Investors expect AI, fintech, consumer tech and cyber security companies to lead the IPO pipeline in the coming year.
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