Best future industries to be involved in

Would love to hear people in the industry discuss their thoughts (without giving away too much IP!) on what the best sectors moving forward are. I am joining MF PE as a generalist fulltime with an ultimate goal of HF (keeping an open mind though) and I was wondering if I should try to start thinking about the best sectors to get involved with.

I know the meta since 2000 has basically been software and tech are the golden standard in terms of tailwinds, but I want to know moreso about the next 20 years. Is biotech going to explode? Tech/software going to continue to grow? Another dormant industry as well?

Basically, what industry skillset should I develop to be able to last as long as I can?

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Comments (31)

Jun 24, 2021 - 4:16pm

Tech, biotech, some sort of tech

Instagram: @dickthesellsider | Substack: dicktoad.substack.com

Jun 24, 2021 - 4:21pm

Technology as it relates to logistics and ecommerce. I suppose that applies to real estate as well. 

  • The U.S. will need to add 330 million square feet of warehouse space dedicated to online fulfillment by 2025 in order to keep pace with the expected uptick in e-commerce sales over the same time period, according to a recent report from CBRE.
  • The report expects e-commerce sales in the U.S. will increase to 26% of retail sales by 2025. Globally, there will need to be an increase of 1.5 billion square feet to keep up with a $1.5 trillion uptick in e-commerce sales by 2025.
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  • Intern in IB-M&A
Jun 25, 2021 - 1:51pm

I swear tech is a fucking meme at this point and doesn't mean anything

Jun 26, 2021 - 4:16am

Tech and all those tech-related industries like EdTech, MedTech, BioTech, FinTech etc. Also, energy industry because of "becoming green" will also be a growth place in the future. Solar energy, EV, wind turbines, these sort of things will be the driving vehicles in the upcoming years.

Jun 26, 2021 - 6:25am

There are a number of emerging technologies that I think could extend the current tech run like quantum computing and some of the new space-related tech. 

Other areas of growth: Biotech, Emerging Markets, Green Energy, Infrastructure, D2C Retail, and Fintech (feel free to add). Note that most of these are tech-adjacent. Over the next decade or so, companies will be forced to become more and more sophisticated technologically in order to grow so the tech skillset should be useful regardless of what industry you end up in.

Jun 29, 2021 - 12:07am

I personally believe consumer is the next big thing. Actually it has always been a big thing because you know, consumer, it's about people. As long as people exist, consumer & retail (whether it's brick and mortar or e-commerce) will be big. 

I do a lot of biotech IPOs and trust me, a lot of biotech founders just want the $$$. They don't necessarily create revolutionary products. 

Sep 18, 2021 - 1:18am

Probably Nanotechnology or Nanomedicine but I have no idea if there is anything even close to a group in IB or anything specific to the space at all in finance. Hell 99 percent of people can't even name 5 nanotechnology companies or what they are doing. However, after extensive research in the field it is easy to say without a doubt that it's going to be in everything and everywhere in the future. The biggest application of nanotechnology right now is being used to find a cure or treatments for cancer. Another field where there is actually IB groups and there is a lot of focus on right now is obviously biotechnology. Safe to say that is also going to play a huge role in the future.

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  • Prospect in IB - Restr
Sep 19, 2021 - 5:38pm

Just a few thoughts:

1. Media and Entertainment

With people shifting their leisure activities from more physical stuff (i.e. going out for walks, going to barbecues, sports, etc) to more virtual stuff (i.e. video games, streaming, e-sports, etc), I feel that there are strong tailwinds within this sector. As the kids of today's generation grow up, start earning money and gain the ability to spend their own cash without getting whacked by their parents, revenue in this segment is likely to explode. 

2. Agriculture

Many other posters also noted this. In many areas, agriculture is changing from a fundamental level. You see many places that have traditionally been agricultural powerhouses seeing declining prospects for the industry (i.e. Northern India is practically running out of water), whereas climate change will likely make it more possible to increase agricultural output in parts of Canada, Russia, Ukraine, etc. As the breadbaskets of the world shift geographically, there is a strong potential for PE investments in these areas - at the very least, I know Canadian funds love agriculture. 

Alongside farmland, there are more niche verticals to look at as well. Many areas that have relied on rain-fed agriculture need to shift to irrigation technology. Large farms are likely to make more use of precision farming to reduce costs, a factor that is also likely to gain support from governments in a few years when they realize that we are wasting too many resources in agriculture. Vertical farming might also become more viable in a few years.

3. Green Infrastructure

EV has been talked to death, but there is also lots of change that could happen within the midstream space. As hydrogen takes off, we will need better transportation for it - I'm no expert on this subject, but I believe natural gas pipelines could be reconfigured with some CapEx to transport hydrogen. This will make it more viable to build up hydrogen infra across advanced nations. 

4. Healthcare

Definitely no expert on this subject matter, but as the median age of the world population, especially in more advanced countries, increases, there will probably be more demand for treatments disproportionately affecting older people. This would include treating conditions like Alzeimer's, and focussing more on oncology. When you've got a crap ton of old people, most of whom want to live longer, you're bound to see more activity in niche biotech verticals focussed on extending lifespans.

You also have more vanilla healthcare that will continue to see lots of demand as the population ages, boosting demand for many pharmaceutical products. I may be overgeneralizing, but older people tend to be taking more meds than younger people.

Another way I think about it is simply the biggest issues that are going to be facing the world. We need to produce food more efficiently, we need to use water more efficiently, energy usage will likely go up as hotter countries get hotter and richer, which boosts demand for air conditioning (surprisingly large consumer of energy). With rising sea levels, we will have more demand for critical infrastructure to protect our cities, we will continue to put more shit into outer space such as satellites to better gather data on everything from storms to surveillance, our populations are ageing and we need to increase lifespans. Applying a top-down approach to these issues shows that some industries worth looking into are healthcare (and specifically biotech), green energy, natural resources (agriculture in particular, there are some water focussed VC and PE firms too), and infrastructure (with space based infra likely to gain traction as a vertical within infra).

I could be entirely wrong though.

  • Analyst 1 in IB - Gen
Sep 20, 2021 - 9:00pm

Media & Entertainment is easily one of the coolest, and probably one of the most fun to cover. Don't get me wrong if I could choose any, that would be in my top 3 just due to it being more fun work. However, it's probably extremely hard to generate alpha relative to other investors because those companies are more intuitive to grasp. Therefore while there are many buyside roles focusing on M&E, it becomes quite challenging differentiating yourself among all the other people who want those seats. 

Just my 2 cents

  • Analyst 1 in IB - Gen
Sep 20, 2021 - 7:51pm

Fintech (Payments/Processors): Huge industry tailwind in the sense that many companies are all pulling to eliminate paper cash (most of the world still pays with cash, so plenty of room for growth). Constantly innovating, and highly acquisitve (i.e Square, PayPal, Mastercard). Open Banking/selling of data will continue to be a hot topic. Lastly these are two more minor reasons but if your coverage is payments you will most likely be in charge of covering all publicly traded crypto companies. Which is interesting to many. I wouldn't necessarily pair fintech/payments with being in charge of covering neobanks. As people in charge of FIG will most likely cover those companies. Lastly, many of these companie are actually quite difficult to wrap one's head around (B2B centered payments can't be easily understood like predicting growth of consumer discretionary).  

TLDR: plenty of major tailwinds, tons of room for growth, buyside expertise is highly valuable/sought after to properly grasp some more challenging concepts (B2B payments technologies).

  • Analyst 1 in IB - Gen
Sep 20, 2021 - 10:10pm

Square, PayPal, Coinbase, Affirm, SoFi, Visa, Mastercard. I disagree. Stripe will IPO in next 12 months, so will a bunch of crypto related companies. Plenty of exciting coverage for ER or buyside analysts covering fintech. 

Curious though, which ones are you referring to?

Sep 20, 2021 - 9:30pm

Rare earth metals

Water

Hydrogen

Compartmental housing

Asteroid mining

Desalinization

Farm acreage

Commoditized cloning /CRISPR technoligy

Nano fibers

Personal commuting device (ie jetpacks)

Cold fusion

Personal robots

Alcubierre Drive

Particle transporters

Namaste.

D.O.U.G.

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Sep 20, 2021 - 11:27pm

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