The mantra of being diversified, but not too diversified, has long been the key to success for many private market allocators. Which is why it was surprising just how concentrated software is within portfolios. Geographical diversification has also become more challenging. Not only is the world bifurcating into geopolitical power blocs, but the debate about sovereignty of capital being deployed within the same borders is becoming more prevalent. What is this doing to challenge the principles of how to build a diversified portfolio? Software may have been the first, but will not be the last to face AI disruption - are there other sectors now to prioritise or rotate out from?
