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Ready investor one: growth capital prepares for practical metaverse assets | Alternatives

It took about a night for Facebook-turned Meta to turn the 90s-born metaverse concept into global headlines, but it will surely take more time before real-life applications materialise in sectors beyond entertainment.

Still, asset owners and fund managers these days see the metaverse as more than just a buzzword, with a promising future for new digital businesses and economic activities across education, healthcare, and even decarbonisation.  

Jang Dong-hun, Poba

There are many areas in which the metaverse technology can be applied, including medical procedures, noted Jang Dong-hun, chief investment officer of Korea’s Public Officials Benefit Association (Poba).

Jang, recalling his experience of trying out a brain scanning device using augmented reality (AR) technology, noted how precise everything felt. 

Poba manages over $15 billion in assets, with 58% in private market.

“Even though [the] metaverse is not yet defined, as far as I know, that kind of technology will gain more importance in each industry. It will take some time. But some industries have already started to realise [its] real economic impact and gains,” Jang said.

“There will be lots of new technology investments for Poba, so I think the investment horizon is broad,” he said, noting that the Korean pension fund is willing to raise investments to growth capital if there is true potential for applications in the real economy.


After Mark Zuckerberg unveiled his ambitious metaverse vision, tech and entertainment giants across the world, such as Apple, Disney, Tencent, Microsoft, and Nvidia, all followed up with their investment and research and development plans to virtualise real-world activities with real-time interaction.

Currently, the metaverse concept is catching eyeballs mainly for its entertainment value and social nature. Critics think it’s more of a public relations campaign than anything. 

But some investors do see the universe beyond. Most recently, SoftBank invested $150 million in the Series B funding of Korean internet giant Naver’s metaverse platform, Zepeto, where users create digital characters of themselves and interact with others, according to a Wall Street Journal report. The platform has even attracted fashion giants like Gucci and Ralph Lauren to sell virtual items on it.

The metaverse will likely present more opportunities for businesses in the form of virtual reality (VR) concerts, museums, and galleries; meeting backdrops with custom advertisements; reducing carbon footprint; and non-fungible tokens (NFTs), said a Hong Kong-based multi-asset portfolio manager with an American asset management firm.

Ido Cohen, Invesco

“I don’t expect the metaverse to be like what we are seeing in the movies, but this metaverse idea could bring old businesses online and create new business or value,” he said.

“Probably you will get the opportunity equally from private and public market. Infrastructure and technology are likely to kickstart this theme, as the network of 5G satellites, the cloud, data centres, soft and hardware, will all need to be upgraded,” he said.

“For a number of years, we have been excited about some of these opportunities. However, we’re also of the view that the maturity of the technology and the bulk of monetisation is still many years away,” said Ido Cohen, Houston-based senior portfolio manager with Invesco. Cohen leads the firm’s $6.5 billion global consumer trends fund.

“Our long-term view is that people still generally have to remain connected to their physical environment for daily utility, safety, and comfort, so we believe that an interactive metaverse which retains contact with your physical environment and enhances it with AR through AR glasses, for example, is the outcome which offers the most use cases and versatility. We also believe that the future will be multiple Metaverses with different utility,” Cohen said.

“Hardware is the gatekeeper and the race to be the biggest beneficiary is a race to create the hardware and peripherals, such as glasses,” he said.


Noting that many market leaders are investing heavily in creation and monopolies appear unlikely, Cohen nevertheless thinks it is interesting to see if only a handful of these companies end up controlling the development and profitability of future metaverses in the same way that only two companies dominate the mobile app store environment today.

Wilson Chow, PwC

Besides hardware providers, there will be those developing the software and a number of companies that stand to benefit. Video game makers, for example, have experience developing 3D digital environments as well as proven intellectual property (IP) for consistent consumer engagement.

There are several software platforms and development engines emerging for developers to quickly create interactive environments from. Suppliers of computing power will also be a part of the ecosystem, Cohen said.

“We are seeing many private equity, venture capital, or corporate venture capitals put their resources and focus into making investments,” said Wilson Chow, PwC global technology, media, and telecommunications leader. He noted that these capitals would want to be early investors in both software and hardware developments designed for metaverse platforms and applications.

Applications can also be extended to telemedicine and education. For education, students can participate remotely in teaching activities with real-time interactive learning process, said Chow.

“We will be seeing traditional healthcare, education, and other business institutions cooperate with operators of the metaverse and telephone companies to co-launch metaverse initiatives for to-business and to-customer applications,” he said.

“The future metaverse world will increasingly be adopted in the post-Covid normal of doing business globally and virtually. In fact, a metaverse world would also support a company’s’ roadmap to achieve net-zero targets for their business,” Chow added.

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