The long game of investment

How Russia could integrate into the new global architecture of capital

The world's largest investors have found themselves in a paradoxical situation. While the amount of available capital keeps growing, there are fewer and fewer options to effectively invest it. Conventional markets have seen their growth rates decline, and new markets are associated with excessive risks. Global stock markets are accumulating liquidity, but reliable large-scale investment instruments are becoming increasingly limited. The challenge investors are now facing is not how to turn a profit, but how to do so in a sustainable way over meaningful time periods.

The above issues became the focus of deliberation at the Investopia forum held in Abu Dhabi, where the prospects for attracting international investment in new global initiatives were debated. Such discussions signal that Russia may have an opportunity to take on a new role in the global investment architecture.

The growth ceiling

The global investment map keeps changing rapidly. Major asset managers including BlackRock (USD 11.6 trillion as of the end of 2024) and Vanguard Group (over USD 8 trillion as of 2023) keep ramping up the amounts of capital under management. Sovereign funds, including Norway’s Government Pension Fund Global (USD 1.74 trillion) and China Investment Corporation (USD 1.33 trillion) have also been going from strength to strength.

And yet mature economies are increasingly signaling stagnation. Speaking at the assembly of the Russian Union of Industrialists and Entrepreneurs in March 2025, President Vladimir Putin noted that the GDP growth rate of the BRICS countries had averaged at 4.9% over the past two years, while the combined GDP growth figures of the G7 economies stood at a modest 1.9%.

Opportunities for scaling investments are shrinking amid the diminishing investment capacity of traditional markets. Although assets continue to generate incomes, the channels for their reinvestment in the same sectors and geographies are becoming increasingly limited. This exacerbates the liquidity pile-up, as significant amounts of capital are being idle pending meaningful and sustainable investment decisions.

 Emerging markets: attractive, yet risky

The obvious answer is to start looking for new areas of growth. Indeed, the largest players keep diversifying their portfolios with more and more investment projects in emerging markets. For example, more than a third of Temasek Holdings' investments span projects in China and other emerging markets in Asia, according to the company's reports. In addition, Saudi Arabia’s Public Investment Fund (PIF), which currently has assets of around USD 600 billion under management, is involved in infrastructure projects across the Middle East, Asia, and Africa, including its key role in the NEOM project.

Even venture capital funds, such as Sequoia Capital, systemically invest in emerging markets, with portfolios featuring Alibaba (China), Zomato (India), OYO, and Byju's. BlackRock offers dozens of ETFs and index funds focused on emerging markets, from Indonesia and the Philippines to Mexico and South Africa. Meanwhile Norway’s GPFG, the world's largest sovereign wealth fund, despite its conservative profile, holds assets in more than 70 countries, including Brazil, India, and South Africa.

Nevertheless, PE investments in selected emerging market companies come with a high level of political and currency risks. Currency volatility remains a key barrier, as devaluation of the local currency can cancel out even very impressive nominal return rates, rendering the investment logic behind a project null and void. As a result, investments in high-growth economies often deliver comparable or even lower real returns than investments in stable but slow-growing jurisdictions. This is why investors are increasingly gravitating towards transnational platforms and projects where risks are spread across multiple countries and returns do not depend on a single currency or regulatory scenario.

From an investment medium to an idea generator

Geopolitical shifts make it increasingly difficult for Russia to rely on traditional ways of attracting capital. This does not necessarily mean that opportunities are shutting down – rather, that a different approach is required. Global capital is increasingly gravitating towards ambitious international initiatives where risks are diversified and returns are ensured through participation in complex transnational projects.

Russia could offer a number of avenues for implementing just such a strategy – first and foremost, its transportation and logistics infrastructure segments, including bridges, corridors, and multimodal hubs connecting Russia to Asia, the Middle East, and Europe. A relevant historical example would be the Suez Canal, which earned Egypt more than USD 10 billion in the 2022/2023 fiscal year alone. Financial proceeds from the canal are one of the major revenue items in Egypt’s budget and an important source of US dollars for the country's treasury. One modern analog is the Belt and Road initiative launched in 2013. As of today, more than 150 countries have signed on to the initiative, drawing almost USD 1 trillion in cumulative investments.

Another avenue is space exploration, where international cooperation is of vital importance and where Russia has rock-solid capabilities. No major space project today is realized in isolation, and even SpaceX pursues cooperation with international partners. International space stations, lunar and Martian missions have transcended the boundaries of pure science to become part of infrastructure of the future, requiring consolidated efforts on the part of governments, corporations, and research institutes. One example is Mars Sample Return, a joint campaign by NASA and the European Space Agency to collect soil samples from the surface of Mars for further in-depth laboratory analysis. In early 2025, it became known that the project stakeholders may consider seeking private funding to advance the project. 

Another area of interest comprises cities and environments of the future. As showcased by projects like NEOM (Saudi Arabia), investors are increasingly interested in new urban ecosystems. Russia has successfully implemented similar pilot projects, i.e., Innopolis, Skolkovo, Sirius, and Koltsovo, all built from scratch, proving the viability of this approach.

Yet another avenue comprises digital infrastructure, i.e., data centers, AI hubs, and telecom routes. These are critical elements of the future global economy. In 2024, investments in data processing centers (DPCs) around the world totaled USD 455 billion compared to USD 301 billion the year before. 

And finally, projects related to collaborative natural resource management, including rare earth elements, fresh water, and agribusiness. This area could benefit from collaboration models where some countries provide access to territories and resources while others open up access to technology, investments, and markets. Russia could play a key role in shaping such coalitions.

It is apparent that potential participation in transnational megaprojects is more than just an alternative to exports for this country. Rather, it is a sound strategy for attracting investment in the circumstances when access to traditional financial flows is limited. The key to success lies in taking deliberate action: shaping ideas, proposing partnership models and well-defined financial return mechanisms. In this context, a win-win strategy ceases to be a mere intention and transforms into a viable economic model.