Article – 01.05.2023

2022 Review and 2023 Outlook


What a difference a year makes. After closing 2021 on a high note, 2022 proved to be much more challenging as we witnessed a major “reset” of some of the excesses of years past. The world economy began the year in relatively good shape, global GDP rebounded to 6.1% in 2021 after contracting 3.1% in 2020, manufacturing was expanding, and global trade was improving. Apple was crowned as the first $3 trillion company and Microsoft announced the $68 billion acquisition of Activision Blizzard. But then February emerged and on the 24th, Russia invaded Ukraine elevating geopolitical risks driving major uncertainty and dislocations across all asset classes. As the war progressed, inflationary concerns heightened as oil prices surged, the Fed started raising interest rates at clips of 75 basis points, supply chain disruptions reemerged, equity markets and valuations tumbled, capital markets shut down and the “R” word started to make headlines.

The strains to the global backdrop only got worse as 2022 progressed, sanctions forced Russia to default on its foreign debt for the first time since the Bolshevik Revolution, Europe was embattled in an energy crisis and scrambled to find alternative sources of energy, and the Chinese economy came to a standstill as widespread lockdowns remained in place to contain the spread of Covid-19. The culmination of these events (and others) wreaked havoc on supply chains and forced nations to start to rethink the benefits of globalization as they looked to find ways to bring manufacturing closer to their borders. Inflation started to rise, corporate profits started to slow and confidence declined.  Food prices steadily climbed, housing activity slowed, and the consumer pulled back – despite employment remaining strong throughout the year (although layoffs are now starting to become more prevalent).  By mid-year inflation became the number one economic concern and the Fed was determined to play its part in trying to control it, hiking interest rates faster than they had ever done, going back to WWII. Despite their efforts, inflation rose to 9.1% in June, and perhaps reached its peak, but not before driving the US into a technical recession (two negative quarters of GDP growth).

Tighter rates and credit standards shut down markets for pretty much all except the highest-quality investors. Sharp dislocations generated some opportunities in various asset classes, especially on the credit side, but for the most part, equities were shuttered. The secondary effects were also damaging as the end of easy money started to peak its head in the crypto markets, beginning with TerraUSD and culminating in the blowup of FTX. In the end, the “Crypto Winter” witnessed the meltdown of over $3 trillion worth of value.  This is on top of the $8.2 trillion lost in the S&P 500 alone.

Although venture was not immune, activity slowed but remained at elevated levels (on a relative basis). Annual global venture funding fell 35% in 2022, according to data from Crunchbase. Startups raised $445 billion, down 35% from a record $681 billion in 2021, but still above the $342 billion in 2020. However, the numbers were front-loaded as funding dried up substantially in the second half of the year, with Q4 seeing a 59% decline year-over-year in funding and only 22 new unicorns crowned versus 150 in Q4 2021.  This year will most likely prove to be another challenging one as VC firms remain cautious and investors work to determine how much capital will be required to support existing portfolio companies versus investing in new opportunities.

However, all that said, 2022 also witnessed some exciting breakthroughs and policy shifts aimed to rebuild America’s techno-economic foundation. Emerging technologies saw impressive advances in areas like applying generative AI to creative tasks that were previously the exclusive domain of humans (DALL-E 2 and ChatGPT), Alphabets’ Waymo and GM’s Cruise won key approvals in driverless ride-hailing services, space exploration and travel accelerated, scientists at California's National Ignition Facility at the Lawrence Livermore National Laboratory announced they achieved a net energy gain in a fusion reactor for the first time, IBM unveiled the largest quantum computer to date and major advances were made in the life sciences sector. 

As we enter into 2023, we remain optimistic that despite the lack of visibility around the direct path, innovation will continue to prevail and great companies will be created this year and in the years to come. We look forward to continuing to identify and invest in some of the most distributive companies and to be a part of the journey as the world continues to make major breakthroughs in innovation. 

2022 Predictions Scorecard


2022 Predictions Scorecard Table V3

2022 Predictions Scorecard

2023 Predictions

2023 Predictions Table V3

2023 Predictions

Thank you again for your continued support. Wishing everyone a safe and healthy 2023.  

Please don’t hesitate to reach out if you would like to discuss anything in further detail or if we can be helpful in any way.


All the best,


John N. Ailanjian, CFA

Managing Partner


Caleagh Creech