Despite a challenging macro environment, there are opportunities to be found in inflation-linked bonds, the energy transition, artificial intelligence, and life sciences, said top executives at some of the world’s largest investment managers during the Bloomberg New Economy Forum.

Ten-year Treasury Inflation-Protected Securities currently offer real yields of 2.5%, said Lim Chow Kiat, chief executive officer at Singapore sovereign wealth fund GIC. Higher asset yields are generally good for long-term return, he added while speaking on a panel at the event held in Singapore from Nov. 8 to 10.

Geopolitical fragmentation also presents opportunities in regions that benefit from the supply chain reconfiguration such as India and Mexico, he said. In addition, there remains a large gap in financing in the energy transition, he added.

GIC has an estimated $770 billion in assets.

The explosion of innovation and the amount of private capital that investors are willing to put to work and make longer-term bets is cause for optimism as well, his fellow panelists agreed.

In dramatically changing times such as now, new technologies have a chance to actually matter, for instance in areas such as artificial intelligence and vaccines, said Noubar Afeyan, chair of biotechnology company Moderna, which he co-founded in 2000 through his venture capital firm Flagship Pioneering.

“The mRNA vaccine has existed for 10 years. But the moment in which it actually became possible to do this at a global scale, actually was a result of the crisis. And the question is what opportunities are they going to present? … And I think that’s where entrepreneurs and innovators have to realize it’s not the time to retreat. This may be a once-in-a-generation opportunity to have the ability to matter,” he said.

Flagship Pioneering has deployed over $3.4 billion in capital to startups.

John Waldron, president and chief operating officer of Goldman Sachs, agreed that there is a lot of capital on the sidelines that has been set aside for life sciences, AI, continuous software development, and decarbonization technology.

“With our clients, we see an enormous desire and demand for private capital to fund these opportunities with longer duration and recognition of the risks that are intertwined with making those investments,” he said. However, he noted that with higher inflation, higher rates can make it harder to make those investments.

Private assets are also starting to go for sizable discounts in the secondary markets, said Jenny Johnson, president and CEO at Franklin Templeton, which had $1.37 trillion in assets under management as of Sept. 30.

“You have a huge number of pension funds and institutions that own private assets. They’re not getting the same kind of distributions they historically received. They have capital calls, and they’re potentially overweighted in the category,” she said.

These investors are under pressure to sell these assets to get them off the balance sheet at discounts of 18%-20% for private equity, 22% for real estate, and 60% for late-stage venture capital.

“It’s really about people need to get this off their balance sheet, not about it being a bad asset,” she said.