Cross-Border Capital: Why the Best Australian Portfolios Now Look Global

Cross-Border Capital: Why the Best Australian Portfolios Now Look Global

There is a version of Australian investing that has worked well for a long time:

• Buy the big four banks.
• Add some resource exposure.
• Collect dividends.
• Let franking credits do the rest.

This was the portfolio for a generation of Australian investors, but it is not the portfolio for the next decade. That’s not because Australian companies are bad businesses. CBA, BHP, and Macquarie are world-class institutions.

The most consequential wealth creation of the next ten years is happening in places the ASX simply does not reach, and the structural gap between where Australian investors default to and where global capital is actually flowing has rarely been wider.

What the ASX can and cannot do

Australia has built something genuinely remarkable: a A$4.2 trillion superannuation system, the fifth-largest pension pool in the world. An exchange that has delivered average annual returns of 8–9% over the past few decades, comfortably outperforming inflation and beating most developed-market bonds over the same period.

But the ASX is structurally concentrated in old-economy sectors: financials, materials, energy, and real estate make up the bulk of its market capitalisation. Anna Milne pointed at something real when she described the ASX as a market of ‘old world industries’. In 2025, Australia ranked 22nd out of the world’s 30 major stock exchanges for returns, behind South Korea, Hong Kong, and Canada.

The ASX is not broken by any means. It’s that the sectors driving the next wave of global value creation (AI, defence technology, robotics, frontier energy, aerospace) are almost entirely absent from it. You cannot buy meaningful exposure to these themes through the ASX because the companies leading them are not listed there. In fact, most of them are not listed anywhere.

Where global capital is actually going

In 2025, the value of venture capital deals in defence technology alone jumped to a record US$49.1 billion globally, nearly double the prior year, according to PitchBook. US private equity exits reached US$728 billion across 1,619 transactions. AI-focused private companies raised at a pace that left public market comparable valuations looking almost quaint.

The top 10 US stocks (Apple, Nvidia, Microsoft, Alphabet, Amazon, Meta, Tesla, Berkshire Hathaway, Broadcom, and JPMorgan Chase) now account for more than 35% of the S&P 500. The Magnificent Seven alone make up roughly 25% of the MSCI World Index. An Australian investor who owns a global ETF already has more concentrated exposure to seven American technology companies than to the entire Australian resources sector.

But here is the more important point: the next generation of those companies is not yet public. Andreessen Horowitz published research in late 2025 arguing that the top decile of high-growth companies are now almost exclusively in private markets: SpaceX, OpenAI, Anduril Industries, Databricks, Anthropic, Stripe. These businesses are adding billions in net-new revenue annually while their publicly listed peers in traditional defence and enterprise software grow at low-to-mid single digits.

The investors capturing that growth are not retail investors who bought at IPO. They are the sovereign wealth funds, endowments, and family offices who got access to private rounds. And increasingly, wholesale investors who access secondary markets before the listing window opens.

The Australian opportunity

The structural gap between the ASX and global private markets is both a problem and an opportunity for Australian wholesale investors. It is a problem because defaulting to domestic equities means missing the asset class where the most interesting wealth creation is happening. It is an opportunity because access to that asset class is now genuinely available to qualified investors in ways it simply was not five years ago.

Hamilton Lane, which manages more than US$1 trillion in private markets assets globally, noted in its 2026 Market Overview that Australian investors remain committed to private markets, and that this commitment is increasingly being driven by AI-related exposure that public markets cannot replicate. The observation rings true. Australia’s superannuation system is beginning to move in this direction, but it moves slowly. We think wholesale investors can move faster.

The specific companies worth paying attention to read like a shortlist of the most important private businesses in the world.

• SpaceX, which filed confidentially with the SEC and is targeting a potential IPO valuation analysts estimate could reach US$1.75 trillion.
• OpenAI, which hit a US$300 billion private valuation in late 2024 and is expected to list by late 2026 or early 2027.
• Anduril Industries, which raised US$4 billion at a US$60 billion valuation in March 2026 (roughly double its valuation just nine months earlier) on the back of a US$20 billion US Army contract and a growing operational footprint in Australia through the Ghost Shark autonomous submarine program.
• Databricks, which raised at a US$100 billion valuation in 2025 and reported US$2.6 billion in annual revenue, growing faster than almost any public software company of equivalent scale.

None of these trade on any exchange, and the only way to access them before IPO is through secondary markets and private platforms.

Follow the capital, not the convention

Mark Haefele at UBS articulates the core principle clearly in The New Rules of Investing: follow the big money. Watch where governments, institutions, and global capital are deploying enormous sums, because those flows tend to shape the decade.

The flows are not ambiguous.

• US$49.1 billion into defence tech in a single year.
• Trillions in AI infrastructure commitments from Microsoft, Google, Amazon, and Meta.
• Australia’s own A$425 billion defence commitment over the next decade, structured around autonomous systems and AI-enabled platforms that Anduril and Shield AI are building.
• The US administration’s August 2025 executive order calling for expanded 401(k) access to private markets, a signal that even regulators recognise where returns are migrating.

The best Australian portfolios of the next decade will not look like the best Australian portfolios of the last decade. They will be more global, more private, and more concentrated in the technologies and companies that are compounding capital in private markets right now.

The question for Australian wholesale investors is not whether this shift is happening. It is whether they are positioned for it before the IPO window closes.

NonPublic provides Australian wholesale and sophisticated investors with curated access to pre-IPO and private market investments. To explore current opportunities including SpaceX, book an introduction call with our team.

This content is general in nature and does not constitute financial advice. Investing in private markets involves significant risk, including the potential loss of your entire investment. You should obtain independent financial advice before making any investment decision.