Navigating Geopolitical Volatility and the Structural Shift to “Atoms”

As markets absorb this weekend’s escalation in the Middle East, we want to provide clarity on our current positioning and what the resulting volatility is telling us about the broader market regime.

The Current Landscape: A Collision of Risks

The coordinated strikes on Iran and subsequent disruptions in the Strait of Hormuz have triggered a classic de-grossing event across global markets. The market response has been swift and consistent with a risk-off playbook: Brent crude spiked sharply as the market prices in potential chokepoint disruption in the Gulf, Gold is nearing record highs again as capital seeks safety, and Technology/AI names — already under pressure — face an additional headwind as investors question the durability of AI capex in an environment of rising physical costs.

Source: CNN

Maintaining Conviction: The “Bits to Atoms” Thesis

While the headlines are dominated by conflict, the underlying market signal is clear: the physical world is re-asserting its value. For three decades, global capital systematically underinvested in the “Atoms” — energy grids, industrial infrastructure, defense systems, and the raw material supply chains that underpin modern economies.

The current crisis is an accelerant, not a catalyst. We believe we are in the early innings of a multi-year cycle where hard assets and industrial capacity outperform purely software-driven models. In a world of fragile supply chains and structurally higher energy costs, competitive advantage is increasingly defined by physical ownership of production and distribution — not code alone.

This dynamic reinforces our existing positioning and the direction of our ongoing portfolio work. We will continue to provide updates as the situation develops.

DISCLOSURES

Please note: This commentary is provided for informational purposes only and reflects the author’s views as of the date of this email.

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