Perfect storm of stakeholders in real estate
To our LPs, our portfolio companies, We have never been more certain, focused, and inspired about the generational opportunity which is upon us. Backing technology that matters and enabling the positive transformation of the built world plays an important role in improving the quality of life for billions globally, accelerating our transition to a sustainable economy, and enabling the decarbonisation of the largest and most polluting industry globally.
When A/O first launched, we had no doubt about the direction the industry was heading in terms of innovation and sustainability. Now, 3.5 years on, the tailwinds are stronger than we could have ever imagined or wished for, with a powerful convergence of regulatory, customer and capital markets pressure, all pushing the industry in the direction of innovation and sustainability. Simply put: the built world is embarking on the single largest industry transition and capex supercycle in the history of the modern world. The companies that we aim to back and support will be vectors for this transition and grow to become some of the most important companies of the next few decades.
An existential threat to the largest industry globally.
The real estate and construction industries are facing unprecedented challenges, from rising interest rates, rampant inflation and regulatory pressure to labour shortages and changing customer behaviour. Technology is now positioned as a mission critical necessity to power the industry forward into the next decades, or else jeopardise the survival and relevance of many of its incumbents, sooner or later.
A looming, intensifying and broadening climate, energy and affordability crisis
Beyond the issues facing the industry head-on, we have entered a period of accelerating climate and energy crises, with annual damages caused by extreme weather events, biblical floods and wildfires reaching $175 billion last year. With annual energy inflation rates exceeding 40% in Europe last year, and global temperatures reaching new heights each summer, the impact of this is being felt by every single person on the planet. This is precisely why enabling the positive transformation of the built world, the largest contributor to CO2 emissions, is the single most tangible way of tackling this climate disaster, while also creating a generational opportunity for those who lead the charge in this transition. The work that we do all day, every day at A/O is front and centre of that generational secular trend, and we are proud to continue leading this effort from Europe with a global strategy.