Gergely Rácz joined the former Generali Alapkezelő as a junior portfolio manager about two and a half years ago. After the firm’s reorganisation he now works as a portfolio manager at Generali Investments CEE Magyarországi Fióktelep. He focuses primarily on emerging and developing market funds, manages funds with East Asian exposure, and recently took over the Innovation Fund, which he describes as one of the asset manager’s flagship products.
AI: regulation, fears and market effects
Rácz says it is natural that regulatory debates and existential concerns intensify when disruptive technologies emerge. These worries deserve attention, but he argues they should not be given disproportionate weight in investment decisions. He remains positive about long-term investment opportunities and does not expect dystopian science‑fiction scenarios to materialise.
Tighter regulation may prompt short-term caution in markets but can also add benefits by creating more transparent and predictable frameworks for technology development, sales and corporate integration. Rácz acknowledges that some dramatic warnings might be driven by PR or lobbying to slow competitors, and suggests waiting for concrete legal or corporate actions rather than reacting to early statements, which often represent market noise.
Historical parallels and the role of fundamentals
He draws a parallel to the 1990s internet investment wave, when massive infrastructure spending occurred and the process was non-linear. From that experience he expects overvalued companies and misplaced optimism, but also stresses that structural demand for the technology looks robust.
On fundamentals, Rácz highlights that supply — chips, memory, data centres and the energy to run them — is struggling to keep pace with demand. A complex global supply chain needs to upgrade before market balance returns. He insists on separating economic fundamentals from market psychology: today stock prices are driven more by momentum and sentiment than by fundamentals, although normalization will come in time.
Numbers and macro risks
Rácz emphasises global indebtedness and geopolitical tensions as key risks. He notes the US 10-year Treasury yield is near 5.3 percent — a more than twenty‑year high — and argues that if it reached 6 percent, it would be a signal that materially different processes must begin. He considers the current large investment cycle fragile because it coincides with very high debt levels and fiscal deficits in developed economies, together with a tense geopolitical environment.
He also points out the link between geopolitics and energy prices: conflicts tend to transmit into energy prices, which influence inflation expectations and thereby the interest rate path — visible now on the US yield curve.
Investment philosophy: how they manage risk
Rácz’s team concentrates on long-term equity investments, favouring companies with flexible business models, solid balance sheets and the ability to weather macro shocks. They maintain strategic liquidity — ‘‘dry powder’’ — to be ready to buy during significant sell-offs, consciously building this reactive capability into fund management.
They are also actively seeking markets with different macro profiles. East Asian markets such as Taiwan and South Korea often have lower debt burdens and healthier external balances, and they play critical roles in the AI infrastructure value chain. Rather than backing single companies, Rácz says they analyse entire value chains to provide diversification.
Less visible but critical suppliers
Rácz mentions that some relatively unknown companies produce indispensable components — for example, critical parts used in chip assembly or specialised cooling equipment for large data centres. These less flashy segments may be strategically important even if they are not in the market spotlight.
Signals for retail investors
For retail investors he stresses the importance of treating daily price fluctuations as noise. He singles out two indicators worth serious attention: 1) the global debt level and its long-term unsustainability; and 2) major geopolitical trends, which they monitor and incorporate into risk models.
Rácz warns that the coming period may see more proxy conflicts between major economic and political rivals and accelerating global fragmentation, forcing peripheral countries to align with one of the big poles (the US or China). These geopolitical anchor points will largely determine the destiny of global capital markets in the medium to long term.
Conclusion
Gergely Rácz sees both opportunities and risks: structural demand for AI and related infrastructure is strong, but market prices often diverge from fundamentals. His investment approach rests on consciously separating market psychology from economic fundamentals, keeping strategic liquidity and diversifying across value chains and regions, while continuously monitoring global debt and geopolitical risks in portfolio decisions.
