Key Takeaways
- • KPMG's US head of private equity participated in discussions at the Milken Institute Global Conference (May 4, 2026) focusing on AI adoption, capital flows, and private credit market dynamics alongside senior executives from Blackstone, Apollo Global Management, Mubadala, and State Street.
- • AI spending among US enterprises nearly doubled year-over-year to $207M in Q1 2026, with AI adoption in wealth management reaching 78% according to KPMG's US AI Quarterly Pulse Survey, signaling accelerated technology integration across financial services.
- • Private credit markets continue to expand as a secular trend, filling institutional capital needs previously served by public markets; senior executives noted the IPO pipeline remains robust despite reduced reliance on public markets for capital access over the past four to five years.
- • Geopolitical tensions, including Middle East conflicts, are triggering significant realignments in global capital flows and investment strategy, with seasoned investors maintaining conviction that diversified portfolios and disciplined capital allocation will navigate ongoing volatility.
- • Institutional investors emphasized selective underwriting in private credit rather than broad-based concerns, with focus shifting from isolated BDC stress to the broader "ocean of private capital" and structural shifts in how companies access financing.
Summary
KPMG's US head of private equity engaged in high-level discussions at the Milken Institute Global Conference in Beverly Hills on May 4, 2026, participating in conversations that reflected the current preoccupations of institutional capital: artificial intelligence's operational and hiring impact, shifting capital allocation patterns, geopolitical risk, and the evolution of private credit markets.
The conference assembled top-tier investors and executives who offered distinct perspectives on AI's economic trajectory. According to KPMG's US AI Quarterly Pulse Survey, average projected AI spending among enterprises nearly doubled year-over-year, reaching $207M in Q1 2026. More broadly, AI adoption in wealth management has soared to 78%, indicating rapid institutional embrace of machine learning and automation across financial services operations. The discussion centered not merely on technology adoption rates but on how companies are repositioning their AI capabilities—positioning workflows as units of labor productivity or operational efficiency that unlock new financing and business models.
On capital markets structure, private credit emerged as a defining theme. Jim Zelter (Apollo Global Management) and Waleed Al Mokarrab Al Muhairi (Mubadala) framed private credit not as a distressed asset class but as a structural response to genuine market needs. Al Muhairi noted that while portfolio design may require adjustments and focus on resilience, private credit's growth trajectory is "inexorable" provided investors maintain disciplined underwriting. Zelter emphasized that recent concerns about private credit volatility overshadow the broader narrative: a massive accumulation of institutional capital seeking returns, combined with a robust IPO pipeline that no longer serves as the primary capital-raising mechanism for mature companies—a fundamental shift from historical norms.
Jonathan Gray (Blackstone) and Ron O'Hanley (State Street) addressed geopolitical headwinds. Gray noted that despite periodic crises—wars, economic shocks—US and global markets have demonstrated resilience, a pattern he expects to persist. O'Hanley flagged Iran conflict dynamics as a catalyst for significant realignment in capital flows, signaling that geopolitical shifts may reshape regional and sectoral investment allocations beyond traditional hedging.
The conversation reflected institutional confidence in the underlying fundamentals of private capital markets, paired with recognition that AI-driven productivity gains and geopolitical reorientation require active portfolio management and selective capital deployment.
The conference assembled top-tier investors and executives who offered distinct perspectives on AI's economic trajectory. According to KPMG's US AI Quarterly Pulse Survey, average projected AI spending among enterprises nearly doubled year-over-year, reaching $207M in Q1 2026. More broadly, AI adoption in wealth management has soared to 78%, indicating rapid institutional embrace of machine learning and automation across financial services operations. The discussion centered not merely on technology adoption rates but on how companies are repositioning their AI capabilities—positioning workflows as units of labor productivity or operational efficiency that unlock new financing and business models.
On capital markets structure, private credit emerged as a defining theme. Jim Zelter (Apollo Global Management) and Waleed Al Mokarrab Al Muhairi (Mubadala) framed private credit not as a distressed asset class but as a structural response to genuine market needs. Al Muhairi noted that while portfolio design may require adjustments and focus on resilience, private credit's growth trajectory is "inexorable" provided investors maintain disciplined underwriting. Zelter emphasized that recent concerns about private credit volatility overshadow the broader narrative: a massive accumulation of institutional capital seeking returns, combined with a robust IPO pipeline that no longer serves as the primary capital-raising mechanism for mature companies—a fundamental shift from historical norms.
Jonathan Gray (Blackstone) and Ron O'Hanley (State Street) addressed geopolitical headwinds. Gray noted that despite periodic crises—wars, economic shocks—US and global markets have demonstrated resilience, a pattern he expects to persist. O'Hanley flagged Iran conflict dynamics as a catalyst for significant realignment in capital flows, signaling that geopolitical shifts may reshape regional and sectoral investment allocations beyond traditional hedging.
The conversation reflected institutional confidence in the underlying fundamentals of private capital markets, paired with recognition that AI-driven productivity gains and geopolitical reorientation require active portfolio management and selective capital deployment.
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