This month’s insights highlight shifting capital flows and emerging sector priorities: Germany sees a cautious investment climate, with defense unexpectedly becoming a growth sector. In Hong Kong, biotech IPOs are revitalising the capital markets while cross-border life sciences licensing intensifies. Japan’s focus turns to leveraging defense-related opportunities with the U.S. In Australia, naval procurement decisions reflect changing geopolitical alliances, while healthcare venture appetite shows early signs of recovery. Across the U.S., early-stage capital remains tight, but life sciences are showing signs of a rebound.

What’s happening in Germany?

Anneliese Sound, Managing Director at Future Potential Management, reports that while significant funds are being mobilized, industry activity and consumer behavior remain subdued. Private equity faces liquidity constraints, slowing new acquisitions, and venture capital investment has dropped by 60%, leaving many startups without funding. Deep tech and defense are notable exceptions, with defense investments, once considered as taboo, now drawing ETFs and institutional interest.

What’s happening in Hong Kong?

Frank Yang, Founder and CEO at Blue Ocean Capital Group, notes three positive streams of capital flow. First, Hong Kong’s capital markets are strengthening, with a resurgence of biotech IPOs attracting strong performance and investor interest. Second, China’s outbound life sciences licensing deals reached USD 50 billion last year, one-third of the global market, bringing substantial capital into Chinese innovation. Third, late-stage life sciences assets are being channelled into the Middle East, both to address unmet medical needs and to establish clinical trial ecosystems.

What’s happening in Japan?

Sou Miyake, Head of VC at Corundum Systems Biology shares that Japan’s recent focus mirrors Germany’s in its attention to defense, though not through domestic defense tech production. Significant funding is being directed to the U.S. as part of trade and tariff negotiations, sparking discussions on how to channel this into startups, particularly in defense-related technologies. Japan’s corporate and government LP market remains notably active compared to other regions.

What’s happening in Australia?

Craig Astill, Managing Director & CEO at The Caason Group, highlights Australia’s evolving naval strategy, including potential procurement of vessels from Germany or Japan, demonstrating shifting alliances and diplomatic ties.

Emlyn Scott, Managing Partner at CP Ventures adds that while Australia’s economy remains steady, investor focus continues to lean towards property. Venture capital enthusiasm is increasing, mega funds are closing, and early IPO market “green shoots” are emerging, though circulation of capital is still limited.

What’s happening in the U.S.?

Prasun Mishra, Founding Partner at Global Sustainability Impact Fund, LLC observes that federal reforms and political uncertainty are constraining early-stage funding, with capital concentrating on growth-stage companies and private markets.

John Abeles, General Partner at Northlea Partners LLLP, sees renewed interest in defense, robotics, AI, and cybersecurity, alongside early signs of recovery in life sciences after its deepest downturn in decades. He anticipates a trend toward company consolidations, multi-project “shots on goal”, to attract more substantial capital.

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