--- title: The Competition for Capital description: "The supply of financial assets is growing as companies and governments seek more capital. How might this changing supply-demand dynamic influence long-term investment returns?\n\n#CapitalMarkets #AI #ExpectedReturns #InvestmentStrategy" image: https://info.glenmede.com/hubfs/GLM%20Assets/IS%20Brief%20Bull%20Bear.jpg --- [![GLENMEDE](https://info.glenmede.com/hubfs/raw_assets/public/Glenmede_September2023/images/dark-logo.svg "GLENMEDE")](https://www.glenmede.com/) - [About Us](https://www.glenmede.com/about-us/) - [Who We Are](https://www.glenmede.com/about-us/#who-we-are) - [Our History](https://www.glenmede.com/about-us/#our-history) - [The Board](https://www.glenmede.com/about-us/#the-board) - [Our People](https://www.glenmede.com/about-us/#our-leadership) - [Careers](https://www.glenmede.com/careers/) - A True Partnership - [Individuals & Families](https://www.glenmede.com/private-wealth-management/high-net-worth-individuals-and-families/) - [Family Office Services](https://www.glenmede.com/private-wealth-management/family-office-services/) - [Foundations](https://www.glenmede.com/endowments-foundations/foundation-investment-management/) - [Sustainable & Impact Investing](https://www.glenmede.com/sustainable-impact-overview/) - [Endowments](https://www.glenmede.com/endowments-foundations/endowment-foundation-management/) - [Financial Intermediaries](https://www.glenmedeim.com/) [![Contact Us](https://no-cache.hubspot.com/cta/default/23579600/c4c39f23-46ff-492e-9f41-770fb4a0aeb5.png)](https://cta-redirect.hubspot.com/cta/redirect/23579600/c4c39f23-46ff-492e-9f41-770fb4a0aeb5) - [About Us](https://www.glenmede.com/about-us/) - [Who We Are](https://www.glenmede.com/about-us/#who-we-are) - [Our History](https://www.glenmede.com/about-us/#our-history) - [The Board](https://www.glenmede.com/about-us/#the-board) - [Our People](https://www.glenmede.com/about-us/#our-leadership) - [Careers](https://www.glenmede.com/careers/) - A True Partnership - [Individuals & Families](https://www.glenmede.com/private-wealth-management/high-net-worth-individuals-and-families/) - [Family Office Services](https://www.glenmede.com/private-wealth-management/family-office-services/) - [Foundations](https://www.glenmede.com/endowments-foundations/foundation-investment-management/) - [Sustainable & Impact Investing](https://www.glenmede.com/sustainable-impact-overview/) - [Endowments](https://www.glenmede.com/endowments-foundations/endowment-foundation-management/) - [Financial Intermediaries](https://www.glenmedeim.com/) [![Contact Us](https://no-cache.hubspot.com/cta/default/23579600/c4c39f23-46ff-492e-9f41-770fb4a0aeb5.png)](https://cta-redirect.hubspot.com/cta/redirect/23579600/c4c39f23-46ff-492e-9f41-770fb4a0aeb5) #### Contact Us # Investment Strategy Brief   |   September 27, 2026 # The Competition  for Capital   ![IS Brief Bull Bear](https://info.glenmede.com/hs-fs/hubfs/GLM%20Assets/IS%20Brief%20Bull%20Bear.jpg?width=550&height=314&name=IS%20Brief%20Bull%20Bear.jpg "IS Brief Bull Bear") ### Executive Summary  - Artificial Intelligence related investment continues to accelerate, pressuring free cash flow and increasing the need for external financing. - Companies are raising capital through debt and equity markets, while government borrowing adds to the growing supply. - As issuance grows faster than the available savings to finance it, more debt and equity are competing for investor capital. - A growing supply of financial assets relative to available capital may support higher expected returns. - Growing capital needs may represent a structural tailwind for long-term investors by supporting higher expected returns. ### AI Hyperscalers have continued to announce new capex plans at a notable expense of free cash flow ![IS Brief 2026-09-28 Chart 1](https://info.glenmede.com/hs-fs/hubfs/IS%20Brief%202026-09-28%20Chart%201.png?width=1000&height=495&name=IS%20Brief%202026-09-28%20Chart%201.png "IS Brief 2026-09-28 Chart 1") The information shown represents capital expenditures and free cash flow by calendar year for AI Hyperscalers. Solid lines represent actual reported figures while dashed lines represent consensus-based projections from the beginning of the year and as of the date shown. AI Hyperscalers include Amazon, Alphabet, Meta, Microsoft, Oracle, and CoreWeave. Actual results may differ materially from projections. References to individual securities or groups of individual securities should not be interpreted as a recommendation to buy, hold, or sell. - Consensus expectations for AI hyperscaler capital expenditures have continued to move higher, as firms expand data center and AI infrastructure capacity. - At the same time, projected free cash flow has declined as spending plans have accelerated, highlighting the growing need for external financing. - The gap between investment spending and internally generated cash flow has widened meaningfully over the past year, prompting many of these companies to seek external financing. ### **Firms are increasingly turning to equity markets to fund growth and investment** ![IS Brief 2026-09-28 Chart 2](https://info.glenmede.com/hs-fs/hubfs/IS%20Brief%202026-09-28%20Chart%202.png?width=1000&height=458&name=IS%20Brief%202026-09-28%20Chart%202.png "IS Brief 2026-09-28 Chart 2") Shown on the left are the sizes of select historical and anticipated initial public offerings (IPOs), measured by market capitalization and total capital raised. Figures for Anthropic and OpenAI are estimates based on publicly reported expected valuations and projected offering sizes. The projections are illustrative and subject to uncertainty, as actual IPO valuations, offering sizes, and timing may differ materially from expectations. Historical IPOs are shown for comparison purposes only and are not indicative of future results. Shown on the right is the annual capital raised from IPOs, with the hashed green bar representing an estimate for full-year 2026 capital raised based on actual and projected issuance. The 2026 capital-raise estimate is illustrative and subject to uncertainty. Actual IPO activity and capital raised may differ materially due to changes in market conditions, investor demand, deal timing, or the size of future offerings. References to individual securities should not be construed as a recommendation to buy, hold, or sell. - U.S. initial public offering (IPO) issuance is projected to reach roughly $225 billion in 2026, driven in part by SpaceX's ~$86 billion offering in June and a potential ~$100 billion IPO from Anthropic in the balance of the year. - The resurgence in IPO activity highlights how companies are increasingly turning to public equity markets as a source of funding, adding to the growing supply of financial assets available to investors. ### Increased government and corporate borrowing have increased debt issuance ![IS Brief 2026-09-28 Chart 3](https://info.glenmede.com/hs-fs/hubfs/IS%20Brief%202026-09-28%20Chart%203.png?width=1000&height=470&name=IS%20Brief%202026-09-28%20Chart%203.png "IS Brief 2026-09-28 Chart 3") Shown on the left are annual gross issuance totals for U.S. Treasury securities in blue and U.S. corporate debt in green. 2026 figures represent annualized estimates based on year-to-date issuance. Treasury issuance includes notes, bonds, Treasury Inflation-Protected Securities (TIPS), and Floating Rate Notes (FRNs), excluding Treasury bills. Corporate debt reflects annual U.S. corporate debt issuance. Shown on the right is annual debt issuance by AI hyperscalers. Values represent publicly issued debt and include debt issued in currencies other than U.S. dollars, converted to U.S. dollars using spot exchange rates on the date of issuance. AI Hyperscalers include Amazon, Alphabet, Meta, Microsoft, Oracle, and CoreWeave. Actual results may differ materially from expectations. References to individual securities should not be construed as a recommendation to buy, hold, or sell. - U.S. Treasury and corporate bond issuance is projected to approach $8 trillion in 2026, while major AI hyperscalers have already issued roughly $247 billion of debt this year, up more than twelvefold from just $19 billion in 2024. - As governments finance deficits and companies fund ambitious investment plans, debt markets are absorbing an unprecedented volume of issuance, increasing the supply of fixed-income securities competing for investor capital. ### A growing supply of financial assets is competing for a limited pool of savings ![IS Brief 2026-09-28 Chart 4](https://info.glenmede.com/hs-fs/hubfs/IS%20Brief%202026-09-28%20Chart%204.png?width=1000&height=503&name=IS%20Brief%202026-09-28%20Chart%204.png "IS Brief 2026-09-28 Chart 4") Shown is the U.S. personal savings rate, measured as personal saving as a percentage of disposable personal income.  - While financing needs have surged, the pool of savings available to fund those needs has grown far more slowly. - With household savings rates subdued, the pool of available capital has not expanded at the same pace as Treasury issuance, corporate borrowing, and equity fundraising. ### The competition for capital may support a higher return environment ![IS Brief 2026-09-28 Chart 5](https://info.glenmede.com/hs-fs/hubfs/IS%20Brief%202026-09-28%20Chart%205.png?width=1000&height=514&name=IS%20Brief%202026-09-28%20Chart%205.png "IS Brief 2026-09-28 Chart 5") The visual shown is a conceptual representation of supply and demand, is provided for illustrative purposes only, and is not drawn to scale or based on actual data. Expected returns are forward-looking estimates, and actual returns may differ materially. - Growing investment needs and government borrowing have increased debt and equity issuance across capital markets, expanding the supply of financial assets available to investors. - If the supply of financial assets grows faster than the pool of available savings, asset prices may need to adjust lower to attract sufficient investor demand. - Lower prices allow investors to acquire the same future cash flows at more compelling valuations, which should lead to higher expected returns across asset classes. ### Glenmede’s 10-year expected returns have risen across multiple asset classes ![IS Brief 2026-09-28 Chart 6](https://info.glenmede.com/hs-fs/hubfs/IS%20Brief%202026-09-28%20Chart%206.png?width=1000&height=508&name=IS%20Brief%202026-09-28%20Chart%206.png "IS Brief 2026-09-28 Chart 6") Shown are Glenmede’s 10-year expected returns for Cash (Bloomberg Treasury Bellwethers 3M), 10-Year U.S. Treasury bonds, Core Fixed (Bloomberg U.S. Aggregate), and U.S. Large Cap (S&P 500) at the beginning of the year and as of the date shown. Glenmede’s estimates of expected returns are arrived at in good faith, but longer-term targets for returns may be uncertain. Actual returns may differ materially from projections. One cannot invest directly in an index. - Glenmede's 10-year expected return assumptions have increased across major domestic asset classes this year, with the largest increases occurring in long-duration fixed income assets. - Part of this improvement may reflect investors requiring greater compensation to absorb a growing supply of financial assets. For example, this has manifested this year via higher term premiums on Treasuries and wider credit spreads on investment-grade bonds. - While many factors influence expected returns, rising capital needs across governments and corporations may be contributing to a more compelling long-term opportunity set for investors. For more in-depth information on this topic, please reach out to your Glenmede Relationship Manager. 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