Risk Ascent | Exploring the Edges of Risk

We often talk about how technology has reshaped business.
We talk far less about the financial engine quietly reshaping technology.

Less noticed is the rise of another quiet power center: Private Capital.

🧩 What is Private Capital?
Public Capital → Transparent, regulated markets anyone can access (stock/bond markets).
Private Capital → Large institutions deploying capital in private, illiquid, less transparent markets.
Since the 2008 Financial Crisis, both private markets & digital infrastructure have expanded dramatically – and they are beginning to interact in ways that redefine how the global system works.

🌍 Two Global Power Centers – Growing in Parallel

1️⃣ Private Capital → Money Flows
A small set of global private-market managers have grown from a few hundred billion in assets in 2007 to over $13 trillion today.
Why the surge?
🏦 Post-GFC banking regulation reduced traditional lending
🪙 Low rates pushed investors into illiquid assets
📄 Private credit filled gaps left by banks
🛡 Insurance balance sheets created long-term (permanent) capital
Private Capital now finances corporate credit, infrastructure, and increasingly digital infrastructure itself.

2️⃣ Digital Infrastructure → Network Flows
Large technology ecosystems now sit at the center of:
🌐 Global connectivity
☁️ Cloud and compute
⚡ AI training
🔎 Data & identity management
These networks have become the backbone of modern economic scale.

🔍 The Overlooked Insight: They Control Different “Flows”

🟦 Private Capital → Money Flows
Credit • Leverage • Liquidity • Ownership transfer
🟩 Digital Infrastructure → Network Flows
Data • Connectivity • Compute • AI capability

Together, they influence:
• How businesses get funded
• How information flows
• How infrastructure is built
• How systemic risk propagates

⚠️ The Emerging Interdependency

Private capital is funding new digital infrastructure – cloud, data centers, semiconductors, AI ventures.
Meanwhile, technology ecosystems are entering financial domains – infrastructure investment, strategic partnerships, and financing initiatives.

This convergence is creating a new form of cross-sector concentration risk – one that sits between finance and technology.

💡 What It Means for Risk Professionals

A shock to the compute layer (e.g., a critical tech platform) could freeze capital flows, while a credit crisis in private markets could slow essential digital build-outs.
Understanding how money flows and network flows reinforce each other will be central to risk management and policy thinking in the years ahead

Questions worth exploring:
• Who now shapes capital formation?
• Who shapes digital access and compute?
• How resilient are these networks if either side is stressed?

I’d love to hear how others in risk & investment roles are thinking about this convergence.