Understanding the Diversity Within Emerging Markets
As Dubai cements its role as a global capital for trade, innovation, and investment, Jefferies once again brought together leading corporates and investors from across Asia, the Middle East, and South America for its second annual GEMS (Global Emerging Markets) Conference, held November 24–25, 2025.
Following a successful debut in 2024, the conference has quickly become one of the region’s most anticipated investor gatherings, featuring one-on-one meetings and focused conversations with C-suite leaders from across emerging markets.
One of the defining themes of the conference was the strength of emerging-market (EM) equities, which have seen an extended rally on the back of strong macro trends and capital inflows. Janet Harbison, Head of International Equities into Europe at Jefferies, and Alex Coffey, Head of EMEA Research, shared their perspective on the EMs’ heterogenous growth stories, short- and long-term mispricing in EM equities, how Jefferies has invested in the region, and more.
A New Phase of EM Growth and Outperformance
Many investors are treating 2025 as a turning point for emerging markets: the first time in a decade that EM equities have outperformed their developed-market peers. As Ms. Harbison explained, “2025 has surprised a lot of investors… Emerging markets are up over 30% as a group this year.”
The factors behind this shift run deeper than traditional EM tailwinds like demographics and industrialization. Those forces remain powerful, but today the drivers of EM growth are more varied. “Emerging markets aren’t just a play on the U.S. dollar or commodities the way they’ve been historically,” Ms. Harbison said. “There are real tech growth powerhouses in Asia and across the rest of emerging markets.”
Social reforms and deeper capital markets are enabling meaningful innovation, with new industries taking hold. As Mr. Coffey put it, “There’s a tremendous amount of innovation happening in emerging markets, at the forefront of industries like payments, biotech, artificial intelligence, electrification, and alternative energy.”
Despite this evolution and outperformance, EM valuations remain deeply discounted. “The markets are cheap, and they’re also really underpenetrated from an index perspective,” Ms. Harbison added. With EM accounting for roughly 40% of global GDP and about 70% of global GDP growth — but only ~12% of the MSCI ACWI index — the case for a long-term re-rating continues to strengthen.
Distinct Growth Stories Across the EM Universe
One of the clearest themes at GEMS was that emerging markets cannot be treated as a single asset class. “Emerging markets aren’t homogeneous,” Ms. Harbison emphasized. “They are a very differentiated set of growth stories.”
India remains one of the strongest structural opportunities, despite its 2025 underperformance. Long-term investment in infrastructure has materially improved quality of life and economic capacity. “Over the last decade, more than 120 million families have been connected to running water in India,” Ms. Harbison noted. With a population of 1.4 billion and a young demographic profile, “almost everything in India is underpenetrated… from airports to travel to coffee to banking.”
China has become a two-track market. Domestic macro indicators remain soft, yet progress in frontier technologies is accelerating at a pace that continues to draw global attention. “Technology is showing explosive growth, and China is actually leading the U.S. in many sectors,” Ms. Harbison said. Advances in autos, batteries, and robotics continue to impress global investors.
The Middle East is building a foundation for long-term expansion. A new generation of leadership, rapid economic diversification, strong population inflows, and one of the world’s most ambitious technology and infrastructure agendas have made the region a meaningful engine of EM growth. “There is a new generation of leaders… very tech-focused in terms of where they want to take this economy.”
Across these regions, hundreds of millions of new consumers are entering the global economy — a secular force reshaping earnings potential, investment flows, and global supply chains.
How EM Central Banks Took the Lead
Another major theme was the strength of EM central banks over the past two years. During the inflation spike, policymakers across Latin America, Central Europe, and parts of Asia acted earlier than their developed-market counterparts.
As Mr. Coffey put it, “Emerging market central banks acted more decisively and more effectively to deal with recent inflation spikes than developed-market central banks.”
As global rate-cut cycles unfold, those policy advantages are expected to remain meaningful contributors to relative performance.
Jefferies’ Investment in Emerging Markets
Both speakers emphasized that Jefferies’ conviction in EM is matched by sustained, scaled investment across its global platform. Over the past decade, the firm has significantly expanded its EM footprint, doubling its Asia headcount and growing coverage from roughly 50 stocks in Hong Kong and China to more than 300. Jefferies has also built and expanded presences in the Middle East and Latin America, including the opening of its Dubai office in 2022, creating an integrated global EM franchise across equities, research, and distribution.
As Mr. Coffey noted, “Over the past five years, we’ve expanded our stock coverage to over 1,400 stocks in emerging markets, and we now cover more than 80% of the emerging market benchmark.” He added that the business itself has meaningfully internationalized: “Our equities business has more than doubled in size. We now make more money (in EM) than we used to make globally five years ago.”
As Ms. Harbison summarized, “There is a huge growth story at play. Earnings are turning around… and over the next five to ten years, emerging markets are going to be a much bigger part of global indices.”
A New Anchor in Emerging Markets: The Middle East’s Growth Story
As Dubai cements its role as a global capital for trade, innovation, and investment, Jefferies once again brought together leading corporates and investors from across Asia, the Middle East, and South America for its second annual GEMS (Global Emerging Markets) Conference, held November 24–25, 2025.
Following a successful debut in 2024, the conference has quickly become one of the region’s most anticipated investor gatherings, featuring one-on-one meetings and focused conversations with C-suite leaders from across emerging markets.
Among the featured speakers were Mohit Kumar, Jefferies’ Chief Financial Economist and Strategist for Europe, and Naresh Bilandani, Head of Central & Eastern Europe, Middle East, and Africa (CEEMEA) Equity Research. This article aggregates their insights on how macro conditions, demographic trends, and an influx of foreign capital have positioned the Middle East as one of the world’s essential investing hubs.
How the Middle East Became Impossible to Ignore
For global investors, the Middle East has moved firmly into the center of emerging-market (EM) discussions. As Mr. Bilandani put it, “Middle East markets cannot be ignored in context of the broader emerging market space.” GCC markets now represent roughly 6.5% of MSCI EM, nearly matching Latin America.
Investors have taken notice of the region’s macro stability, increasingly sophisticated policy environment, and long-term strategic planning. These factors are compelling — and they’ve helped distinguish the region from other EMs and, at times, even the United States.
In conversations with Asian investors looking to allocate outside the U.S., Mr. Kumar reports that the Middle East is the new favorite target: “We have seen a lot of capital inflows, and that phenomenon is likely to continue over the coming quarters.”
The Region’s Core Appeals
Macroeconomic predictability is central to the Gulf’s investment case. Strong fiscal positions, high-quality sovereign balance sheets, and the long-standing dollar peg give investors clarity on inflation, FX risk, and monetary-policy transmission.
Mr. Bilandani emphasized that the peg “offers (investors) a hedge in a volatile interest rate environment,” a structural advantage that sets the region apart from the wider EM universe.
Demographics add another layer of support. Saudi Arabia and the UAE continue to report fast population growth, and the countries’ labor-force participation is expanding meaningfully. “Women as a part of the workforce have increased… to as high as 36% over the past ten years,” Mr. Bilandani noted. These shifts support long-term consumption, housing needs, and household formation.
The credit backdrop is equally constructive. As Mr. Kumar explained, “We haven’t had yields this attractive for a very long time,” at a moment when central banks across EM remain poised to ease.
The Key Sectors Benefiting From the Middle East’s Growth
The convergence of strong demographics, policy ambition, and capital inflows has created momentum across a range of sectors. Healthcare, real estate, and infrastructure all stand to benefit from rising population growth and higher workforce participation, Mr. Bilandani predicted.
Technology and tourism also show great promise. In tourism, both Saudi Arabia and the UAE are pursuing aggressive near- and long-term growth. In technology, both countries are seeing steadily expanding venture activity and a growing pipeline of startups. Dubai’s goal of cultivating 30 global unicorns over the next decade reflects the region’s intent to build competitive, innovation-led industries rather than rely solely on legacy sectors.
A Region with Global Ambition
As the region continues to deepen its capital markets, expand its technology base, and attract rising foreign capital, Jefferies expects the Middle East to remain a focal point for investors searching for durable growth and policy stability in an evolving EM landscape.
“Overall, we are very positive,” Mr. Kumar said in his closing remarks. “We are highly invested in the Middle East — this is the growth opportunity. And we think equities and credit will continue to perform.”
Investing in Care: The PE Playbook for Healthcare Transformation
During the Jefferies Healthcare Conference, senior private equity investors gathered for a wide-ranging discussion on how capital, operating expertise, and long-term conviction are reshaping healthcare. Moderated by Michael Dodds, Managing Director at Jefferies, the panel explored deal structuring in a dislocated market, sector-specific value creation, regulatory complexity, and evolving exit pathways across healthcare services, pharma, and medtech. Participants included:
Michal Chalaczkiewicz, Investment Partner, GBL Advisors
Kate Briant, Founding Member and Senior Partner, CapVest Partners
Cathrin Petty, Co-Head of North American Private Equity, Global Head of Healthcare and a member of the Partners Board at CVC Capital
Silvia Oteri, Partner, Global Head of Healthcare, Permira
Opening Perspectives
Michael Dodds: To start, give us a sense of your platform’s approach to healthcare investing.
Michal (GBL): GBL is one of the largest investment holding companies in Europe. We are not a traditional PE fund. We invest balance-sheet capital and have a growing ambition to deploy more in private markets.
Cathrin (CVC): I’m the Co-Head of North American Private Equity, Global Head of Healthcare and a member of the Partners Board at CVC and I’ve been investing in this industry for 30 years. We love the healthcare sector (even with pressure on all sides).
Kate (CapVest): I am a founding member of CapVest and sit on our investment committee. We manage around 10 billion and healthcare is a significant part of the portfolio.
Silvia (Permira): I have been with Permira for 21 years and focused on healthcare for the past 12. Healthcare is one of our four core sectors. We have invested heavily in pharma and pharma services.
Topic 1: Deal Structuring in a Dislocated Market
Q: Deal volumes are down and deal sizes are up. What creative structures are getting transactions done today?
Kate: Buyer and seller valuation expectations are still apart. Our LPs are looking for DPI and creative structuring can unlock situations. We see more selling shareholders retaining a stake. This is common in the US and increasingly so in Europe because it aligns everyone. We also use deferred consideration tied to exit performance and vendor loans with zero coupon to bridge valuation gaps. There is more liquidity and capacity in private capital markets. As a mid-cap investor, we can bring that capital alongside us to deliver solutions.
Michal: Our acquisition of Affidea for example came from a long-term investor, so the structure was straightforward. The challenge was the macro backdrop. We acquired it during high volatility around the invasion of Ukraine. We quickly refined the strategy from diagnostic imaging to a fully integrated care provider and made a management change on day one to be able to deliver on the refined business strategy. Leverage matters. We used five times debt, but flexibility was the priority. Any capital structure needs enough headroom for geopolitical and economic uncertainty. People strategy drives value. Execution drives value. The board’s role is critical. At GBL we have a healthcare innovation committee, so we stay close to disruption.
Cathrin: This is the most complex investing environment I have seen in my 30-year history of investing in healthcare. It is an incredibly challenging environment to invest and to exit. Every transaction has been a bespoke solution of one kind or another. Ask yourself, how are you solving the specific needs of both the company and the investors?
Silvia: We have complexity in our DNA, but recently we have focused on more straightforward deals. Creativity for us is less about structure and more about shaping industries.
Team capability is essential. When I became sector head, I concentrated on building a great team. We spend so much time learning as a team, including countless Harvard Medical School courses! Ultimately, people need to choose who they are going to work with, be it management, investors, or founders so you need to be knowledgeable, creative and collaborative.
Topic 2: Undervalued Sub-Sectors and Consolidation Opportunities
Q: Which healthcare sub-sectors are undervalued or ripe for consolidation?
Michal: Ha – it feels like nothing is undervalued. We have almost 30 percent of our portfolio in healthcare services and want to diversify so we are looking at medtech and specialty pharma. Medtech valuations have normalized.
Silvia: Pharma was hit by uncertainty following Liberation Day. The subsectors of pharma services that were very dependent on biotech were already down. Public valuations are depressed. Private valuations are not necessarily. In medtech, supply-chain issues caused real strain. In pharma services, several subsectors still lack scaled players.
Topic 3: IPOs, Exits, and the Path to Liquidity
Q: With larger fund sizes, does the IPO matter more as an exit route?
Silvia: Yes. Funds are getting bigger, and the IPO must be considered. We have had strong strategic exits, including selling all our assets to large strategics. We are doing IPOs and considering them as the market comes back, but it starts with the right asset, and you need to build a great story over time.
Dodds: Agreed, we often position the IPO route for sponsors as a way to plan their next exit and shorten the monetization timeline.
Kate: Growth stories need long horizons. Public markets reward longer arcs than a typical three-year plan.
Cathrin: Management teams are cautious, focused inward, and large US strategics still hesitate despite access to capital. In Europe, we have to work harder to stimulate interest from both public markets and strategics.
Michal: I’d love to see more IPOs. A more robust group of listed healthcare services players would help with comparables and valuation benchmarks.
Topic 4: Continuation Vehicles and Holding Periods
Q: How are you thinking about continuation vehicles (CVs)?
Kate: Continuation vehicles help solve structural issues in PE. Given the lifecycle limitations of our funds, they allow us to stay with companies that we feel have a great long-term trajectory. We even recently recapped a continuation vehicle, call it a “CV squared!” They let you retain control and bring in passive LPs.
Cathrin: You want to keep your best companies. Healthcare growth cycles are long, from early R&D to commercialization, and some of our best assets were held for eight to ten years. Portfolio diversification enables you to return capital while holding winners.
Rapid-Fire & Audience Questions
Q: One word to describe the healthcare deal market in 2026.
Michal: recovery
Kate: improving
Cathrin: improving
Silvia: bipolar
Q: What matters more in a deal: clinical outcomes or EBITDA margin?
Michal: Clinical outcomes come first. Every board meeting starts with them.
Cathrin: If you build a great company with great outcomes you’ll have great EBITDA margins.
Silvia: Both are required for a successful business, but profitability supports investment in people, technology, and AI.
Q: Biggest mistake PE investors make in healthcare?
Michal: Forgetting the fundamentals when capital is cheap. We see this again and again.
Cathrin: Misjudging regulatory risk and leverage. We live in a highly regulated market. You need flexibility in your leverage structure otherwise you don’t have room to move.
Kate: Underestimating the capital intensity of healthcare.
Silvia: Underestimating complexity across regulation, team-building, and execution.
Q: If you were not in private equity, which healthcare job would you choose?
Michal: Veterinarian
Kate: Research
Cathrin: Wildlife documentary work (I failed in research, that is why I do PE!)
Silvia: Academia. I love learning. If not healthcare, maybe a piano player, but I already tried and failed…
Q: Do PE investors take enough risk?
Silvia: Probably not, but things are improving. Ten years ago, medtech deals triggered fears about recalls and implants. PE can never take VC-level risk. We can’t lose on nine deals and make it back from one.
Kate: PE has a limited timeframe, if you have a five-year hold on average and you make a misstep it can really affect your return, so it confines the risk you can take.
Cathrin: It depends on where you are on the journey. More portfolio diversification allows more R&D exposure with less vulnerability. We’ll never take the same risk that a VC can in biotech.
Q: Will there be significant geographic shifts in the next decade?
Cathrin: What we see from a regulatory perspective is a divergence of behaviors. You see protectionism, but also dislocation. The US is moving to accelerate the approval environment. Europe less so.
Michal: There is no better recipe than proper geographic diversification, whether like us at GBL that is across European headquarters or globally. We should not forget the US market though.
Jefferies to Acquire 50% Interest in Hildene Holding Company, Expanding Strategic Relationship that Began in 2022
How Steven Klinsky Built One of Private Equity’s Leading Firms
At a recent luncheon, Rich Handler, CEO of Jefferies Group, hosted Steven Klinsky, Founder and CEO of New Mountain Capital, for a conversation on one of finance’s most ambitious career paths: launching and scaling a private equity firm.
Mr. Klinsky — whose New Mountain Capital has grown into a $60-billion AUM platform and one of the most respected names in global investing — spoke to a room of entrepreneurs and investors about his trajectory, the highs and lows along the way, and what still motivates him today.
This article captures the main takeaways from the discussion. Quotes have been edited for length and clarity.
Klinsky’s Rise Through PE’s Formative Years
Mr. Klinsky began his career at Goldman Sachs, where he co-founded the Leverage Buyout Group. Those early years, he said, were private equity’s wild west. The first major public LBO had been led by KKR in 1979, and the field was still dominated by a handful of small, scrappy firms. Within Goldman’s LBO Group, Mr. Klinsky helped execute more than $3 billion in early landmark transactions as the industry took shape.
He joined Forstmann Little & Co. in 1984, at a moment when private equity was starting to professionalize and scale. Over the next 15 years, he rose to General Partner and helped oversee private equity and debt partnerships totaling more than $10 billion.
When he founded New Mountain Capital in 1999, he centered the firm on two principles: defensive growth, meaning never invest in a cyclical industry that can disappear under you, and business building, a disciplined focus on being the best repeat builder of companies, deal after deal.
What It Takes to Raise a First Fund
“Raising the first fund was very challenging,” Mr. Klinsky said. “You endure a lot of rejection. It’s always the hardest part.”
He urged the audience to keep their pitch simple and lead with the investment narrative. There’s a reflex in fundraising meetings to begin with context and a wall of data. That information matters, he noted, but you risk burying your story if you don’t establish it upfront. Clarity, simplicity, and conviction are a fundraiser’s best assets.
Mr. Klinsky also emphasized the importance of confidence. To win over a naturally scrupulous and skeptical audience, he said, you need to project strong belief in your vision and track record.
Ultimately, he added, these tactics only worked because New Mountain Capital was built on two sound and consistent, core principles. A grounded commitment to defensive growth and business building gave substance to every pitch and investment that followed.
Inside New Mountain’s Culture of Collaboration
As New Mountain Capital continued to grow, several audience members asked what it takes to build a professionalized, collaborative culture inside a scaling firm.
Mr. Klinsky emphasized qualities that echo Mr. Handler’s own vision for Jefferies: a flat, collaborative, intellectual culture consistently wins. “Everyone in the firm gets equity in every deal, from our general partners to our receptionists,” he said. “And every associate is involved in the investment committee from day one.”
Even on their first deal, associates are expected to present and handle questions at IC. Their views are weighed on merit, not seniority.
Mr. Klinsky also described a practice unique to New Mountain: each year, everyone at the firm writes an anonymized memo arguing for which defensive-growth sectors to add to the portfolio. The memos are circulated internally, scored by the entire team, and the top ideas often become guiding investment theses in the years ahead.
Execution Is the Differentiator
As he moved through questions about LP relationships, attracting the right advisors, and building firmwide capabilities, one theme kept surfacing: excellent execution enables everything.
Mr. Klinsky’s guidance to current and aspiring fund managers consistently came back to his founding principle of business building. If you take a best-in-class approach to developing companies, he said, the rest will follow.
For more perspectives from the Jefferies team and other world-class business leaders, follow Jefferies Insights.
Insights from Bloomberg: How AI Is Reshaping the Research Desk
At a recent Jefferies luncheon on “Beyond the Hype: Practical AI for Buy-side Decision Making,” senior leaders across finance and technology gathered to explore how AI is reshaping investment decision-making. The discussion focused on how generative AI is reshaping investor workflows, which platforms are emerging as leaders, and where adoption still hits friction.
This article highlights key insights from the keynote fireside conversation between Shawn Edwards, Chief Technology Officer at Bloomberg, and Brent Thill, Jefferies’ Tech Sector Leader for Software and Internet Research.
AI Moves from Experimentation to Daily Workflow
Major financial-data providers are moving quickly to embed Generative AI into the core of their products. Questions about how to integrate the technology into analyst workflows are top of mind — and at Bloomberg, utilization and integration into its products has been swift and transformative.
“It is enabling us to do things that we were trying to do for years,” Mr. Edwards explained. “It is an incredible, incredible technology.”
At Bloomberg, the goal has been to help increase users’ efficiency without supplanting their expertise. “(AI) doesn’t replace a good analyst,” he explained, but it can free them from time-consuming tasks so they can spend more time on the more strategic, interpretive work.
This isn’t necessarily an equalizer, Mr. Edwards said; not everyone will suddenly become a competent analyst. It’s more of an accelerant for Bloomberg Terminal users who are already good at their jobs — giving them more bandwidth and sharper capabilities.
Agentic Systems Built for Analysts
Bloomberg is now deploying agent-driven systems that synthesize research, validate facts, and deliver analyst-grade answers on demand. “You can type in your high-level thesis and questions into our system, and our agents . . . synthesize an answer,” Mr. Edwards said.
The vision is to remove the need for analysts to know which database or function on the Bloomberg Terminal holds the right information. This kind of information-management orchestration has been one of the most effective early uses of generative AI. For analysts across the industry, the system handles data routing and retrieval, eliminating the manual logistics that typically slow down research. Even more impactful than finding information is its ability to synthesize cohesive answers from the broad range of available data and documents.
Early testing with Bloomberg’s customers shows that complex workflows — such as comparing revisions across filings or pulling historical trends — can shrink from hours to minutes. Analysts can spend more of their time on client-facing work: judgment, interpretation, and storytelling.
Accuracy and Guardrails
Because generative AI is still relatively new inside financial workflows, reliability remains a central concern. Mr. Edwards stressed that Bloomberg built layers of validation to make sure the system doesn’t push unreliable or hallucinated content into production. “We had to build all these validators,” he said. “Every single agent, every single subsystem… there’s lots and lots of techniques and checks in real time.”
Mr. Edwards noted that the engineering challenge wasn’t just building the agents, but making sure all of the checks could run without adding latency that slows analysts down.
A Model-Agnostic Approach
One thing that differentiates Bloomberg’s approach is its model-agnostic infrastructure.
“Latency and cost matter, so we evaluate models continuously and shift workloads accordingly,” Mr. Edwards said. The company relies on different models, hyperscalers, and latency tradeoffs to build a resilient system.
“We’re not tied to any one model. Different tasks need different strengths, so we route to the model that performs best for that job.”
The Future of AI and Financial Data
Bloomberg’s success signals that AI has become operational infrastructure for leaders in financial data and capital markets around the globe. The hype that surrounded early adoption efforts, Mr. Edwards said, has given way to “capabilities that we’ve never had before.”
It also offers a practical model for capital-markets firms looking to adopt agentic AI. To this audience of CIOs and CTOs, Mr. Edwards offered a straightforward piece of advice: start with one specific workflow and build around it.
“Start with something very specific and understand what you’re trying to solve. Define your criteria for how you’ll evaluate results. And then when you focus on something specific, you’ll learn to quickly iterate in order to get measurable results.”
He cautioned that large language models can be unreliable unless they’re properly constrained and validated. Beginning with a narrow, well-defined use case creates the feedback loops needed to build trust and refine the system.
At a moment when firms are racing to adopt AI as quickly as possible, it’s a useful reminder of the work required to generate real, dependable value from these tools.
Is Healthcare Where Tech Was a Decade Ago?
As enthusiasm returns in force to the healthcare sector, investors and C-Suite executives from leading public and private companies around the globe will gather at the Jefferies Global Healthcare Conference in London from November 17th through the 20th. Over the course of the week, thousands of investor and company meetings will take place amongst industry leaders, and many will take the stage to discuss key opportunities and challenges facing biopharma, specialty pharmaceutical, medical technology, healthcare services, healthcare IT, and other key sub-sectors, as well as the future impact of AI.
In anticipation of the main event, we sat down with three of Jefferies’ top healthcare investment bankers to discuss what they are seeing and hearing, as well as what to expect in 2026.
Here are the insights we received from Phil Ross, Chairman of Global Healthcare Investment Banking; Tommy Erdei, Joint Global Head of Healthcare and European Healthcare Banking; and Chris Roop, Head of America’s M&A and Joint Head of Global Biopharmaceuticals Investment Banking.
Q: What is the defining trend in healthcare transactions today?
Phil: Over time, the market in biopharma has trended up and to the right with pockets of volatility along the way. Despite an ever-changing geopolitical environment inside and outside of biopharma, the strategic need across the ecosystem has never been greater. With the uptick in positive data readouts and a more robust merger and acquisition environment, market participants are becoming increasingly optimistic, choosing to bolster balance sheets,, while larger organizations are allocating capital to address their strategic needs through both internal and external development.
Our team here at Jefferies is very active across the spectrum of transactions as deal sizes continue to increase across the board. Favorable market reactions to strategic transactions , coupled with the significant return of capital driven by large-scale biopharma M&A continue to drive optimism. It’s creating a flywheel effect for further M&A and capital formation. That said, investors and strategics remain highly selective, and scarcity value remains. From a biology perspective, we know so much more than we did a decade ago. However, from a market or industry perspective, one could say biopharma remains in the early innings, similar to where tech was a decade ago.
Large pharmaceutical companies aim to further streamline their businesses and continue to shed non-core businesses, such as animal health and consumer assets, in order to focus on higher-growth, innovative products. Over the past few years, companies such as Johnson & Johnson and Sanofi have spun off or sold their consumer health businesses, and in turn strengthened their product portfolios through the acquisitions of Intra-Cellular and Blueprint Medicines.
The sleeves of capital available to the industry also continue to expand as investors seek exposure to the biopharma sector. For example, Blackstone, Bain, Apollo, and KKR have all recently made big investments in the sector. Again, compared to tech, exposure to biopharma is in the early stages.
Q: What is the state of Big Pharma now, and what are they looking to invest in?
Chris: Most of the large pharma companies are in a similar predicament, with some of their top-selling treatments going off patent by the end of the decade. Together, they need to find about $70 billion in new revenue by 2030 to maintain mid-single digit growth. It is too late to solve that problem solely through internal R&D efforts, so we expect external business development and M&A to play a key role in filling the gaps over the next few years.
As these large companies approach the patent wall at the end of this decade, they are seeking companies offering treatments that are close to commercialization and have a large total addressable market (TAM). This is why you saw seven or eight $5 billion+ biopharma M&A deals in 2025. On four of them, Jefferies advised the target. Much of the capital returned to shareholders from these deals is being redeployed in our space, which has supported the capital-raising efforts in the ecosystem over the last couple of months.
Q: Is there a sufficient supply of good companies for large pharmaceutical companies to acquire?
Chris: Yes and no.
Filling that $70 billion revenue gap will require the industry to launch a couple of dozen multi-billion-dollar products. The definition of a blockbuster, traditionally north of $1 billion, continues to scale larger as the need persists. Products of that commercial scale don’t come around often.
Today, there are over 700 public biotech companies, more than twice the number that existed a decade ago. This is a function of an accommodating capital formation environment that allowed many early-stage companies to tap the public markets four or five years ago. Fast forward to today, these stories are beginning to pan out, or not, based on clinical data. For those that are clinically de-risked and address large markets, pharma is a willing buyer. But, in an active M&A market like we’ve seen this year, each scale deal takes an important opportunity off the board for pharma. So, good science is the only way to replenish the pipeline.
Q: Where do you see AI having an impact in the near future?
Tommy: Every day, you learn that AI might be useful for something else, and it’s not just the well-publicized potential for speeding drug discovery.
For example, AI can analyze large amounts of clinical data to identify real-world evidence of links to other uses of a drug that haven’t been documented. AI is also creeping into manufacturing, making things more efficient. AI can identify supply chain variables that were previously less obvious. It can predict demand to ensure sufficient supply and an adequate supply chain from the first component to the last.
Q: What areas of drug development are of particular interest to investors today?
Phil: Products targeting the immune system, so called I&I, are uniquely appealing because the same treatment may be able to treat a lot of different diseases given their impact on causal biology. Look at what is going on with drugs like Dupixent, sold by Sanofi and Regeneron. Given the biological target of the drug, it can immune mediated disorders such as atopic dermatitis, COPD, and asthma.
There is still plenty of momentum behind GLP-1s and cardiometabolic treatments as evidenced by the strategic activity this year.
I will give you one area that is generating a lot of attention, and that’s psychedelics. Global rates of anxiety, depression, bipolar disorder, and schizophrenia are increasing, and these ailments have proven challenging to treat. So, a lot of companies are going after psilocybin and LSD derivatives as treatments, with emerging research suggesting some remarkable outcomes for severe depression. Johnson & Johnson was at the forefront of this trend, having legitimized this space with its ketamine nasal spray, Spravato. We see a wave of development activity coming in behind this.
Q: How do you see the CDMO sector evolving after the rush of activity that occurred during and shortly after COVID?
Tommy: COVID obviously woke a lot of people up to the vulnerability of global supply chains. That drove years of robust transaction activity in the contract development manufacturing organization (CDMO) space, as companies rearranged their footprints, expanded their technology offerings, and focused on service levels to capture a greater market share from their customers.
2025 saw a lull due to a disconnect between buyer and seller valuations, partly driven by the slowdown in development revenue growth resulting from lower biotech funding for finding new drugs. But we now expect a resurgence in activity.
For starters, external events – in the form of tariffs – have once again created a renewed focus among customers on the localization of production. And even more importantly, the upswing in biotech financing will lead to an increase in new drug development and numerous new products (that require manufacturing) entering clinical trials, with many eventually being commercialized. October specifically was among the strongest months on record for biotech financing and equity transactions. This replenishes the coffers of a significant number of biotechs, which, in turn, will feed into the pharma services space, including CDMOs and contract research organizations (CROs) in particular.
Q: Plenty of healthcare industry trends are global. But what is an area where you see a fundamental divergence between markets in the U.S. and abroad?
Tommy: Specialty pharma is an excellent example of where the environment in the U.S. and in Europe has been totally different.
I know there are a lot of definitions of specialty pharma out there, but we think of it as companies that aren’t as heavy in R&D, that create a lot of value through licensing or finding new growth avenues from older molecules. And generics are certainly in the specialty pharma bucket.
The U.S. specialty pharmaceutical sector has had an overhang from an investor’s point of view due to aggressive pricing strategies that increased profits but generated backlash from consumers and regulators, as well as the high debt levels of a few companies. We are finally seeing the sector start to come back, with companies finally deleveraging and a few, like MannKind, Amphastar, and ANI, engaging in highly strategic M&A that drive fundamental value and enhance their position with patients.
In contrast, in Europe, the sector has been and remains a very solid market segment going from strength to strength. Some of this is because most specialty pharmaceutical companies did not dramatically raise prices or increase leverage, which has created a more favorable operating and deal environment. Consequently, the specialty pharmaceutical sector has been far more robust in Europe than in the U.S. However, the difference is now finally starting to narrow.
We have seen this pattern in several major deals we have advised on this year. One involved our role in the sale of a majority stake by Bain and Cinven in the German pharmaceutical company Stada Arzneimittel AG to the private equity firm CapVest, for about €10 billion. In another major deal, we represented GTCR in its acquisition of the generic drugmaker Zentiva from Advent International for €4.1 billion. However, in the US, the sector is also returning to strength, where we advised MannKind on its highly strategic move to acquire SC Pharmaceuticals.
All in all, 2025 has been a year of transition with strong momentum starting to form across most sectors heading into what appears to be a strong 2026.
Jefferies GEMS Conference Returns to Dubai: Q&A with Majed Al Mesmari and Walid Armaly
As Dubai strengthens its position as a global capital for trade, innovation, and investment, Jefferies is once again convening leading corporates and investors from across Asia, the Middle East, and South America for its second annual GEMS (Global Emerging Markets) Conference, held November 24–25, 2025.
Following a successful debut in 2024, the conference has quickly established itself as one of the region’s most anticipated investor gatherings, offering a unique format of one-on-one meetings and focused discussions with C-Suite leaders from across emerging markets.
We sat down with Majed Al Mesmari, Managing Director and Head of MENA Investment Banking, and Walid Armaly, Managing Director, Co-Head MENA Equities, to discuss what is driving momentum across MENA and beyond, and how Jefferies’ growing presence in the region reflects its long-term commitment to clients in the world’s fastest-growing markets.
The GEMS Conference: Building Momentum
Last year marked Jefferies’ inaugural GEMS Conference in Dubai. What made it so successful, and what have you carried forward into this second edition?
Walid Armaly: It was the first emerging markets conference of its kind based in Dubai. The MENA conference calendar is very full, so we differentiated by focusing on emerging markets in a way that attracted a broader group of investors. This year we have built on that success by expanding the number of participating companies and international investors, while maintaining the one-on-one, high-quality meeting format that makes the event so valuable.
Majed Al Mesmari: Based on feedback from clients, Jefferies’ global equities sales franchise was a key differentiator. We pride ourselves on having one of the world’s largest and most connected equity sales teams, and our ability to engage not just generalist investors but also sector specialists has been a major factor in the conference’s success.
Dubai has become one of the world’s most dynamic business environments, driven by diversification, regulation, and innovation. What makes the city such a compelling backdrop for a discussion about emerging markets right now?
Majed: Dubai continues to attract high-net-worth individuals, entrepreneurs, and talented professionals from around the world. From a tax and regulatory perspective, it is obviously extremely attractive. However, when we speak with private equity firms, who are often the most discerning when it comes to capital deployment, they no longer view Dubai and the Gulf as capital-exporting regions but instead as destinations for investment. There are very few places globally that combine high growth and high returns without the typical emerging-market risks like geopolitical tensions, capital controls, or currency volatility.
Walid: The city has evolved from a transient business or tourist hub into a true home for families and global corporations alike. Visa reforms, social changes, and business-friendly policies have made it far easier to live and operate here. Many clients are now setting up regional headquarters that rival, and often surpass, their other more established global offices in scale and significance.
The MENA and Emerging Markets Outlook
Within MENA specifically, what themes or sectors stand out as most compelling for international investors heading into 2025?
Walid: One of the biggest themes has been population growth, particularly in the UAE, where we see the impact reflected through banks, real estate, utilities, and even transport companies. Across the region more broadly, reform and index-inclusion stories continue to drive engagement. Saudi Arabia’s ongoing social reforms and gradual relaxation of foreign ownership limits are particularly notable, while Bahrain and Oman are pursuing upgrades to Emerging Markets by the major index providers like MSCI and FTSE, which shows real proactivity from local markets to reach global investors.
There is also strong momentum around technology and innovation. The UAE is positioning itself as a regional hub for AI, with active partnership discussions and initiatives involving global leaders such as Microsoft, NVIDIA, and OpenAI. In Saudi Arabia, there is a growing focus on sports, entertainment, and esports, reflected in the role of the Public Investment Fund (PIF) of Saudi Arabia in a consortium that entered into a definitive agreement to take Electronic Arts (EA) private for $55 billion and the country’s expanding calendar of international events from golf to F1.
Emerging market equities have been described as one of the most mispriced asset classes globally. What factors are driving that valuation gap?
Majed: While some assets may appear mispriced, many MENA equities actually trade at a premium compared to global peers. That reflects the structural growth drivers Walid mentioned such as population expansion, reform momentum, and economic diversification.
The UAE–India and Asia Trade Corridor
The UAE–India trade corridor is expanding rapidly under CEPA and other frameworks. How do you see this shaping investment flows and corporate activity in the region? How is Dubai positioning itself as a bridge between MENA and Asia, particularly in capital markets and financial services?
Majed: It is no secret that the UAE, Saudi Arabia, Turkey and Egypt are all deepening engagement with the Global South, which is where much of the world’s growth and investment activity will take place in the coming decades. As trade and investment corridors strengthen, particularly between MENA and India, this region is emerging as a true connector between East and West. We are seeing the foundation of long-term partnerships for goods, services, and capital formation that will define the next phase of global growth and rival trade corridors in the Northern Hemisphere.
Strategic Alliances and Regional Growth
In September, Jefferies and SMBC announced a significant expansion of their Global Strategic Alliance, including 2.5 billion dollars in new credit facilities. How does this strengthen Jefferies’ presence in MENA?
Walid: The region values strong lending relationships, and large-scale banks with meaningful balance sheets tend to dominate corporate finance conversations. Having access to SMBC’s lending capabilities has opened doors to discussions where Jefferies can potentially play a meaningful role in future transactions.
Majed: Clients find the combination compelling, because it brings together a global advisory platform and a lending partnership through SMBC. Many of SMBC’s long-standing clients are now engaging with Jefferies in new ways. Given the scale of debt issuance in our region, with record levels each year, the alliance positions us well to support that continued growth.
A Long-Term Commitment to the Region
What does holding GEMS in Dubai signify for Jefferies’ long-term engagement in the region?
Walid: Jefferies has really invested significantly in the region. Just four years ago, we had three people on the ground. Today, we are a team of thirty, with Jefferies’ bankers based in Dubai and Abu Dhabi, and office space in Riyadh. Our competitors are not investing at the same pace or depth.
Our leadership is directly engaged, with our CEO Rich Handler and company President Brian Friedman visiting the region regularly, reflecting the firm’s conviction in the opportunity ahead. We are here to stay, and we are excited to support this region as it continues to evolve and grow from strength to strength.
Majed: Dubai has long been the most established and well-covered center for regional activity, but Riyadh is rapidly emerging and Abu Dhabi has clear ambitions of its own. There is often media focus on whether Dubai, Riyadh, or Abu Dhabi will become the dominant financial hub, but by portraying this as a rivalry or a zero-sum game, that framing misses the bigger picture. Each of these cities is developing in ways that complement one another and enhance the overall attractiveness of the region. The growth achieved by any one of them helps elevate MENA as a whole to a globally competitive position. For international companies, choosing to be in one center or another is not a sign of limited conviction elsewhere. It reflects the region’s depth, diversity, and collective potential. At Jefferies, we see that potential.
Insights from Japanese Companies – Allocating to the Energy Transition
In October, Jefferies and SMBC co-hosted a forum for senior executives from leading Japanese corporations and investment firms. The event, titled “How to Commercialize the Japanese Energy Transition,” examined how companies can monetize opportunities tied to the global transition and Japan’s Green Transformation (GX) Plan, a $1 trillion initiative to reduce emissions over the next decade.
One session, “Insights from Japanese Companies: Allocating to the Energy Transition,” featured Shuichiro Kawamura, President of Energy & Environment Investments (EEI); Wataru Sato, General Manager at Sumitomo Corporation; Takuto Saito, Head of Investment Team at Sumitomo Matsui Investment Bank; and Jeff Tang, Managing Director of Energy Transition Investment Banking at Jefferies.
This group of corporate leaders, bankers, and transition investors compared notes on what is required — financially, operationally, and narratively — for Japanese companies to attract capital for the energy transition.
What “Transition” Means Inside a Japanese Conglomerate
Mr. Sato described Sumitomo Corporation’s transition work around two lanes: decarbonizing its own footprint and scaling solutions with partners.
The company established an Energy Innovation Initiative in 2023 to advance new energy (hydrogen, SAF/biofuels), expand power businesses including renewables and distributed systems, and build a carbon management portfolio through forestry, carbon capture and storage (CCS), and carbon dioxide removal (CDR).
The CCS/CDR challenge, he noted, is “high durability” paired with “very high cost.”
A Cross-Border Strategy for CCS and CDR
On Sumitomo’s CCS team, leaders are grappling with the limits of domestic storage. Japan’s geography pushes the need for cross-border CCS: liquefying CO₂ in Japan and storing it abroad.
Mr. Sato referenced ongoing work in Australia, the UK, and Alaska, where Sumitomo is securing offshore storage and participating in pipeline and transport projects. On CDR, he pointed to rising corporate demand from technology and financial firms, but noted that costs, standards, and durability remain constraints.
Lessons From a Longtime Transition Investor
Mr. Kawamura, who leads Japan’s longest-running climate and energy venture investment platform, offered his view from 20 years of investing cycles: “there’s at the end of the day no such thing as [a reliable] green premium.”
His funds operate on 10-year horizons with 4–7-year exits, so his team prioritizes business models that have already gained traction in the U.S. or Europe. Usually, he observes a two- to three-year lag before adoption in Japan.
Mr. Kawamura spoke to the details of execution: site control, access to energy data, speed, and bankable financing pathways. He described scaling a solar/storage business by starting with energy-efficiency data across thousands of rooftops, and building a domestic carbon-accounting platform before expanding overseas.
Going forward, he expects consolidation among “behind-the-meter” solution providers and urged corporates to avoid hype cycles and prepare for integration.
Global Trends in the Transition — and What Japan Can Learn
Mr. Tang highlighted three global patterns that shape how capital is moving:
- U.S. energy companies tend to invest in adjacent capabilities, like biofuels, CCS, and advanced geothermal.
- European firms pursue broader diversification into utility-scale renewables and energy services.
- Korean conglomerates frequently spread minority stakes across many technologies.
The lesson for Japan: control, governance, and scalability matter. Minority stakes can trap capital. Mature platforms that lack capital often generate better investor outcomes. And in the U.S., unprecedented electric-load growth — from data centers, electrification, and on-shoring — makes anything that links new generation to new load increasingly valuable.
What Global Investors Want to Hear From Japanese Companies
Across the panel, one theme stood out: investors reward clarity in how companies sequence their transition stories. Companies that demonstrate short-term resilience (LNG, flexible thermal, near-term reliability) and then articulate medium- and long-term growth plans (renewables, ammonia co-firing, CCS/CDR) earn more confidence. This is especially true when risk-sharing structures and capex caps are explicit.
Investors needn’t worry much, the speakers said, when governance is clear and capital discipline is visible.
What Japan Needs From Policymakers and Finance
Speakers emphasized durable policy, scalable frameworks, and financial structures that match 15–20-year asset lives — particularly in CCS and CDR, where UK- and Norway-style models have accelerated early projects.
They also underscored the need for transition pathways that reflect local realities in Asia. This includes different power mixes, grid constraints, levels of industrialization, and GDP per capita. One-size-fits-all screening won’t work; companies must design regionally feasible solutions.
Follow along for more insights from Jefferies’ Sustainability and Transition Team on the Japan GX Plan and other important climate investing themes in the weeks ahead.