The investors and executives who throng Davos every January are many things. But above all, they’re rich. And they’re starting to see plenty of opportunities to stay that way under Donald Trump.
At coffee bars and cocktail parties in the Swiss town, which hosts the World Economic Forum’s annual meeting this week, conversation has often turned to how money can be made from the rise of a populist firebrand. Amid all the panel-talk of reducing inequality and re-invigorating the middle class, the Davos set is hard at work looking for ways to safeguard and expand its wealth even as anti-establishment movements roil global politics.
That means enjoying the benefits of a Trump-driven boom in the U.S., where the business world is celebrating his pledges to slash taxes and loosen regulations. Stock markets have surged to near record highs, and banks like Goldman Sachs Group Inc. and Citigroup Inc. have reported strong earnings.
“If you look at what’s happened to U.S. bank stocks in the last six weeks, they’re up 30 percent,” said Huw Jenkins, the vice-chairman of Sao Paulo-based lender Grupo BTG Pactual. “The U.S. looks like it’s a great place to invest right now.
Willing Capital
Optimism about money-making opportunities under the Trump administration goes well beyond the markets.
The real estate mogul is stocking his cabinet with finance-friendly figures like billionaire investor Wilbur Ross and former Exxon Mobil Corp. chief Rex Tillerson. And Trump’s promise to reinvigorate infrastructure spending, with the co-operation of a Republican-dominated Congress that will be eager to involve private firms, opens potentially huge business opportunities.
China Investment Corp., the country’s $814 billion sovereign wealth fund, is “actively” seeking opportunities in U.S. infrastructure and manufacturing, its vice-president said in Davos on Wednesday. Spanish utility Iberdrola SA would be “delighted” to invest in new energy infrastructure in the U.S. if Trump makes it a priority, CEO Ignacio Galan told Bloomberg Television on Thursday.
“The capacity for infrastructure funded by government is basically limited by the size of the deficit,” said Bank of Montreal CEO Bill Downe, whose company is a major underwriter of port and road projects. “There’s a lot of private capital willing to do that.”
The sudden embrace of Trump in Davos is jarring in its contrast with what many of its attendees said about him before. The overwhelming majority supported either his Democratic opponent, Hillary Clinton, or more mainstream Republican candidates, many on the grounds that they viewed the real estate mogul as dangerously volatile.