The bitcoin cryptocurrency is a bubble which will burst, but the underlying blockchain technology will have some useful applications, according to a director at Harbourvest Private Equity (HVPE).
Speaking on investment megatrends this morning, Richard Hickman – director of investment and operations at the £995m London-listed HVPE trust – said he believed bitcoin was one of the most over-hyped investment themes of recent years.
Pete Wilson, managing director at the Harbourvest firm which invests HVPE's and institutional investors' money in private equity funds around the world, added that the firm had little exposure to cryptocurrency. Harbourvest has previously indirectly invested in businesses such as Deliveroo, Airbnb, Dr Dre's Beats headphones and Snapchat.
“Cryptocurrency has all the hallmarks of a classic boom,” said Hickman.
Harbourvest will also be turning its attention away from UK retail, according to Wilson, as consumer confidence has taken a hit following Brexit.
Yet the UK will not fall out of favour entirely. Although Harbourvest plans to focus on China and the huge multitude of small US companies over the next decade, Wilson said that particular niches in the UK would still see favour. Funds like the technology-focused HgCapital Mercury and those managed by scale-up specialists Inflexion, he noted, would continue to see Harbourvest's support.
Harbourvest's top megatrends to watch out for in the next decade:
1. A technology leap centring around artificial intelligence, the internet of things, self-driving cars and digital medicine
2. Demographic shifts such as people getting older will drive innovation in healthcare and medical technology, while millennials' preference for spending on experiences rather than saving will prompt new business models
3. China's increasing influence across the globe, along with a burgeoning venture capital industry within the country, will open up new opportunities.