QUOTE BOX Global finance leaders flag shifting capital flows, AI impact at Milken

• Gulf sovereign wealth funds control $3.2 trillion in deployed capital, with the Iran war expected to trigger major realignment of these capital flows globally
• Industry leaders defended private credit growth as filling market needs and distributing rather than concentrating risk, contrasting it with the 2008 banking crisis where concentrated risk caused systemic failure
• Executives see AI creating productivity gains and innovation rather than mass unemployment, though concerns were raised about displacement of entry-level workers and inadequate retraining programs for gig economy workers

Summary: Milken Conference 2026 Highlights Shifting Capital Flows and AI Impact

Top executives at the Milken Institute Global Conference in Beverly Hills on May 4, 2026, addressed key themes including geopolitical tensions, private credit evolution, capital reallocation, and artificial intelligence's economic impact.

Private Credit Outlook

Industry leaders largely dismissed concerns about private credit risks as overblown. Apollo's Jim Zelter noted recent concerns focus on a "small area" of Business Development Companies, missing the broader trend of massive private capital growth reducing companies' need for traditional IPOs. Carlyle CEO Harvey Schwartz emphasized private credit distributes rather than concentrates risk, contrasting favorably with the 2008 banking crisis. Morgan Stanley's Daniel Simkowitz sees "noise" creating alpha-generation opportunities in M&A financing.

Capital Flow Realignment

State Street CEO Ron O'Hanley highlighted a major shift triggered by the Iran war, noting Gulf states and sovereign wealth funds have deployed $3.2 trillion globally, signaling significant capital flow realignment.

AI Impact

Executives expressed optimism about AI-driven productivity gains. Schwartz supports the productivity narrative but rejects mass unemployment scenarios. However, CalPERS CEO Marcie Frost warned AI will disrupt entry-level positions, particularly in the gig economy where retraining programs are limited.

Market Resilience

Blackstone's Jonathan Gray emphasized market resilience despite successive crises, expressing confidence in continued economic momentum for both US and global markets.

Regulatory Concerns

CalPERS' Frost raised concerns about retail investor access to complex instruments like private equity, citing recent software debt market exposure issues and liquidity mismatches.

The conference underscored industry confidence in private markets' maturation while acknowledging technological disruption and geopolitical uncertainties reshaping global capital allocation.