Now I see why River and boutique are all of a sudden interested...

Now I see why River and boutique are all of a sudden interested in LPE....Globally fund managers are buying up the utilities and power required for phase 2 of AI .

Hedge funds are pulling money from the technology sector to buy up utilities stocks as investors cash in on the first leg of the artificial intelligence rally that helped push the share market to record highs.
Fund managers are now looking to other corners of the share market to capture the second phase of the so-called AI trade. It comes as they continued to boost their exposure to equities this year alongside the 10 per cent rally in the S&P 500.
Hedge funds started the second quarter with a record exposure to shares, while mutual funds are holding the least amount of cash ever, according to Goldman Sachs’ analysis of $US6.1 trillion ($9.1 trillion) of equity positions.
That is despite a broad reduction in exposure to the so-called magnificent seven, with hedge funds buying more shares in Apple, but trimming their exposure to Amazon, Nvidia, Microsoft, Meta, Alphabet and Tesla.
It means the megacap tech stocks accounted for just 13 per cent of hedge fund long portfolios, despite the companies making up a quarter of the total market capitalisation of the Russell 3000 Index in the US.
The shift comes as investors cash in on ‘‘phase one’’ of the AI trade – which has rocketed chipmaker Nvidia’s shares 121 per cent this year – to buy up infrastructure companies that are involved in the build-out of AI.
‘‘In addition to higher equity exposures, funds have also begun to raise their exposures to pockets of the market that represent the next phases of the AI trade,’’ said Goldman Sachs’ US-based chief strategist, David Kostin.
‘‘At the sector level, investor enthusiasm over the broadening AI trade has manifested itself through greater exposure to the utilities sector.’’
Many fund managers view utilities stocks as a play on the AI power theme, given a large amount of energy is required to run and train AI models. This led to mutual funds lifting their holdings in the sector to new highs in the first quarter of this year.
Hedge funds have also been buying up utilities and have lifted their exposure by the most of any sector, swinging from 76 basis points underweight utilities stocks to the Russell 3000 to 75 basis points overweight.