Net Interest 2025 Year in Review
AI and all the rest
Welcome to new subscribers who joined via Institutional Investor magazine’s profile of me last week. There are now 96,917 of us.1
This year, I published 46 posts and 15 interviews, covering a range of issues in the finance sector. AI was a big theme as it latched onto capital markets for a growing share of its funding. Private markets attracted a lot of attention, too, as they continued their expansion across both equity and credit. And retail investors remained in the spotlight, buying the dip in April and embracing new innovations to increase their influence over markets.
The five most-viewed posts on Net Interest according to page views were:
When I wrote this in January, analysts projected that the five big hyperscalers – Amazon, Alphabet, Microsoft, Meta and Oracle – would spend $288 billion on capital expenditure in 2025. By year end, the number is over $400 billion. With much of it channeled to data centers, I took an early look at what (and who) is financing the boom.
Dan Bricklin, co-creator of the world’s first computerized spreadsheet, said that it “took 20 hours of work for some people and turned it out in 15 minutes and let them become much more creative.” As an analyst who benefited from that transition, I test whether AI will have the same effect on the research process.
Yale University, pioneer of the ‘endowment model’ that popularised holding private equity in long-term portfolios, put some of its private equity portfolio up for sale in April. A sign of the top?
In the year Warren Buffett announced his retirement, Bill Ackman positioned himself as his spiritual successor. Just last week, he announced a deal to acquire a Bermuda-based insurance company, taking “a page from Mr. Buffett at Berkshire Hathaway”. This post builds on previous analysis of the Berkshire and Pershing Square models to see if he will succeed.
“Europe has a real problem,” said Jamie Dimon this month. It hasn’t stopped European markets from giving chase to the S&P 500. This post from January builds the case. Bookended by a piece in December which looks at European banks’ outperformance, it remains useful reading for investors struggling with how much to allocate to Europe in 2026.
Bubble Trouble
It was difficult to escape bubble talk as the year progressed. My contribution to the debate lay in three posts:
October Throwbacks. In 2024, non-bank financial institutions grew assets by 9.4% – double the pace of the banking sector – to increase their share of total global financial assets to 51% ($257 trillion). Feels a bit like 1907?
Bubble Trouble. Public market valuations are not as stretched as they were in 2000, but some private market valuations may be. No company in modern history is projected to burn as much cash before turning a profit as OpenAI.
Bubble Trouble 2. The launch of the ABX subprime index in January 2006 created a coordination point for the unwind that followed. Silicon Data’s H100 Rental Index is worth keeping an eye on.
Retail Resurgence
Retail investors are closing the gap on institutions, making up close to 21% of US equity trading volume, versus 30% among institutional buy-side firms. Some consequences:
Robinhood’s Smile. Best performing stock in the MSCI World Financial Index two years in a row.
Casino Royale. How poetic that Robinhood replaces Caesars Entertainment in the S&P 500 index.
Prediction Markets Grow Up. Sports and finance are converging in a trend consistent with Kalshi co-founder’s long-term vision “to financialize everything and create a tradeable asset out of any difference in opinion”.
Private Markets are the New Public Markets
Even the UK House of Lords felt the need to hold a hearing to “understand the growth in private credit and private equity funds”. Those honorable lords who read Net Interest have a head start:
Apollo’s Web. Latest in a series of posts on Apollo that started in 2022. If you want to see the future in finance, look at what the smartest financial engineers do on nights and weekends. That means watching Marc Rowan of Apollo.
Banking’s Disruptive Competitors. BDCs are where public markets and private credit collide.
KKR’s Berkshire Dreams. Bill Ackman isn’t the only one keen to ape Buffett. KKR’s co-CEO likens his new Strategic Holdings division to “a mini Berkshire Hathaway”.
The Battleground in Payments
Payments continues to be a fast-moving area at the intersection of finance and technology:
Partner Swap. Remember the show Wife Swap? Payments companies FIS and Global Payments are giving it a go, although they want to make it permanent.
Agentic Friday. According to Salesforce, $14.2 billion in global online sales and $3 billion in US online sales were driven by AI and agents on Black Friday and that’s just the beginning.
Klarna Chameleon. Come on, this has to be my best title of the year. Klarna was one of the ‘Class of 25’ fintechs to IPO this year. It hasn’t gone well.
Laying a New Infrastructure
Regulatory oversight of crypto loosened in 2025, and underlying blockchain technology emerged as a source of innovation independent of crypto trading:
Ready Layer One. There’s a rush on to develop a purpose-built public blockchain for financial applications. In this post, we look at the runners and riders.
The New Money Market. Stablecoins in circulation hit $309 billion in December, up from $207 billion at the beginning of the year. The US Treasury is paying attention and so are we.
Big Bang 2.0. In a white, pin-striped suit in Cannes, Robinhood CEO Vlad Tenev laid out his vision. “I believe tokenization is the greatest capital markets innovation since the central limit order book.” Is he right?
My Favorites
Over the years, I’ve snuck a lot of biographical detail into my posts. Last year, for example, I reflected on 30 years in finance. This year, I looked at 150 years of American finance – and my family’s role as a spectator. And having written plenty about hedge funds from an analytical perspective, I dish out what I’ve learned from investing in them.
I am extremely grateful to all of you who value my work sufficiently to hit the subscribe button. I wish all of you a Happy New Year, and I’m looking forward to a great 2026.
Bah humbug to the 21,240 who have unsubscribed.
Happy New Year, Marc!
Happy Christmas, Mark. Was great to meet you this year.