(Bloomberg) -- The deals market is ripe for a rebound after a protracted slump, according to the head of Macquarie Asset Management.

There’s “a lot of dry powder,” Ben Way said in an interview with Bloomberg Television on Monday. “It is picking up this year.”

After absorbing the initial shock of higher interest rates, markets are now “retooling their business cases,” which is leaving buyers and sellers with a more realistic starting point for discussions, Way said. 

“Free money is not normal,” he said. “All investors have to recalibrate round what is an appropriate capital structure” and “people probably got too bullish around the use of debt versus equity.”

For infrastructure investors with a longer-term horizon, the rate cycle plays a lesser role than thematic strategies, Way also said. Among the biggest thematic drivers today is artificial intelligence and all the ways in which it’s affecting other industries such as data storage and energy consumption, he said. 

Other thematic investment strategies include the green transition, which now has enough momentum to power ahead even if the political backdrop changes, Way said, who also noted that Macquarie “had limited exposure” to commercial real estate.

“Irrespective of who is in the White House, there will be strong momentum,” he said. “Rational actors around the world are investing in things like solar and wind. because it makes sense from a cost point of view.”

Read More: Macquarie Says Asia Is Top Spot for Boom in Renewable Projects

©2024 Bloomberg L.P.