Investment Committee - May 2026

The AI Infrastructure Supercycle and Macro Regime Shifts

The Dominant Theme

As we progress through the second quarter of 2026, the global macroeconomic landscape is defined by a new regime of high cross-asset correlation and a definitive structural shift toward artificial intelligence infrastructure. Following the ceasefire announced in early April, we observed a robust market rebound. However, this recovery masks underlying complexities: despite tightening credit spreads and a retreat from March's risk-off panic, we are witnessing a unique environment where equities, commodities, and yields are often moving in tandem.

Macroeconomic Picture and Geopolitical Risks

Our analysis of the current environment reveals that the "regime of abundance" remains decisively over, replaced by sticky inflation and shifting geopolitical strategies.

• Yields and Sticky Inflation: While equity markets have shown resilience, nominal bond yields have resumed their ascent. The US 10-year Treasury reached the 4.40%–4.45% range—an annual high—coinciding with recent US peace memo requests. Concurrently, the 5-year US inflation swap has returned to resistance levels, indicating that structural inflation persists.

• Energy Dynamics: Oil continues to exhibit extreme volatility, spiking to $115 before settling near $94. We are closely monitoring the UAE's potential departure from OPEC. Their strategic calculus suggests treating oil as a "negative carry" asset; the goal is to maximize production and secure high prices before alternative energy solutions permanently suppress demand. A drop in oil prices toward the $50–$70 range would present distinct challenges for the US economy.

• Currency and Election Volatility: We recommend avoiding overexposure to the US Dollar. The upcoming November elections introduce significant risks of internal instability, particularly in a stalemate scenario. Aligning with our previous forecasts of mean reversion, we have observed the EUR/USD pair move from the 1.15 level toward 1.18.

The Technology Paradigm Shift

A central focus of this month's committee was the rapid evolution of the technology sector. The investment thesis has decisively rotated from AI model creators to the physical infrastructure required to sustain them—specifically semiconductors, data centers, and energy.

• Capex and Compute Scarcity: Hyperscalers (Microsoft, Amazon, Broadcom, Google) are dramatically increasing capital expenditures for AI infrastructure. Market demand is vastly outstripping supply; notably, Anthropic was forced to throttle the quality of its Claude model due to a lack of computational power, while Google has explicitly stated that chip shortages are capping potential revenues.

• Hardware over Software: Traditional Software and SaaS business models are lagging. Large Language Models (LLMs) are now capable of generating their own code, threatening legacy SaaS revenue streams. LLMs are rapidly becoming a new "abstract layer" of computing, where natural language replaces traditional coding and agent frameworks replace standard applications.

• The Edge Computing Threat: Hardware like the Apple Mac mini is selling out globally, being repurposed as affordable home servers to host local AI agents. While currently used primarily to interface with major cloud networks, this trend toward local execution poses a long-term structural risk to cloud provider dominance.

Portfolio Strategy and Asset Allocation

Our investment mandate remains anchored in "Controlled Resilience," prioritizing capital preservation over directional speculation. The portfolio has successfully recovered from April's drawdown, and we are maintaining our current structural positioning with low duration.

Asset Class	Allocation	Strategic Notes
Fixed Income	40%	Primarily short-duration investment grade; Greek/German carry focus.
Equities	24%	Reintroduced Global Select Dividend 100 for defensive posture.
Commodities	5%	Geopolitical spike hedge; focused on energy and industrial metals.
Alternatives	31%	High-conviction exposure via Unicorn, AQR, and Bitcoin.

Regional Outlook

We maintain a structurally negative view on European equities due to expensive energy, supply chain friction, and reduced competitiveness compared to the US, Japan, and Emerging Markets. However, elevated European bond yields (e.g., Greek government bonds at 3.80%, and the German Bund touching 3.10%) provide an attractive margin of safety via carry, justifying our controlled risk in fixed income.

Systematics & Volatility Harvesting

Our systematic strategies have performed admirably. The Skynet model delivered exceptional results by correctly identifying the macroeconomic regime shift and aggressively allocating to AI infrastructure. Moving forward, we are planning to introduce a new "reverse convertibles" strategy to harvest volatility and inject uncorrelated yield into the portfolio.

Authors: Kostas Metaxas, Yiannis Sapountzis and Kostas Asimakopoulos