Kearney Survey Shows 88% of Investors Boost FDI Amid Geopolitical Tensions

Why It Matters

The Kearney findings signal a fundamental re‑orientation of global capital flows, with investors prioritizing policy stability and supply‑chain resilience over pure market returns. For the investment‑banking sector, this translates into heightened demand for cross‑border advisory, sector‑specific financing, and risk‑modeling services that can navigate an increasingly volatile geopolitical environment. By quantifying the weight investors now place on industrial policy and geopolitical risk, the report provides banks with a data‑driven roadmap for where advisory pipelines are likely to expand—particularly in AI‑enabled manufacturing, green‑technology projects and emerging‑market infrastructure. Firms that align their product offerings with these priorities stand to deepen client relationships and capture a larger slice of the anticipated $1‑trillion‑plus FDI surge over the next three years.

Key Takeaways

• 88% of senior executives plan to increase FDI in the next three years
• 84% consider industrial policy a key investment factor
• China climbs to 4th place in Kearney's 2026 FDI Confidence Index
• Vietnam gains emerging‑market status, attracting index‑eligible capital
• Investment banks face rising advisory demand for AI, green tech and supply‑chain‑resilience deals

Pulse Analysis

Kearney’s index arrives at a moment when geopolitical fault lines—U.S.-China rivalry, the lingering effects of the Russia‑Ukraine war, and shifting trade blocs—are reshaping the calculus of capital allocation. Historically, investment banks have thrived on predictable macro‑economic trends; today, they must embed policy‑risk analytics into every pitch. The 88% commitment to expand FDI suggests that, despite headline volatility, institutional confidence in long‑term growth remains robust, but that confidence is now tethered to the clarity of industrial policy signals.

The surge in interest for AI and green‑technology sectors reflects a broader structural shift: investors are chasing assets that can deliver both financial returns and strategic resilience. For banks, this means expanding beyond traditional debt‑equity syndication into hybrid instruments—green bonds, sustainability‑linked loans, and AI‑backed financing structures—that align with client ESG mandates while offering differentiated risk profiles. Moreover, the elevation of Vietnam to emerging‑market status underscores a geographic diversification trend that will pressure banks to deepen their on‑the‑ground capabilities in Southeast Asia, a region historically under‑served by Western advisory houses.

Looking ahead, the next Kearney release will likely capture the impact of any policy pivots—such as new U.S. export controls or EU green‑deal incentives—on FDI flows. Banks that can translate those macro‑shifts into actionable deal pipelines will not only capture fee revenue but also cement their role as strategic partners in a world where geopolitics is as decisive as balance sheets. The ability to model scenario‑based outcomes, integrate ESG criteria, and mobilize capital across borders will be the new competitive frontier for investment banking firms.