HALO and the Repricing of Resilience: Why AI Favours Strategic Assets
15 April 2026
Markets have a habit of naming things just after they have moved. The Financial Times’ recent piece on “the HALO effect” is one of those moments. HALO, heavy assets with low obsolescence risk, puts a name to a shift many investors have been sensing, and one that plays directly to STAR’s ‘Strategic Assets’ approach.
If AI compresses the information edge that underpins many business models, then assets tied to physical networks and essential services should look comparatively more dependable. But the more useful conclusion is that markets are repricing resilience. When times feel good, people pay for growth. When times feel uncertain, they pay for staying power.
Disruption is no longer something you mention in passing. It has become an underwriting input. In the last cycle, many asset-light businesses were rewarded for speed, scalability, and high incremental margins. Those features are still attractive, but they can look less comforting if the value proposition is built around areas that AI can replicate or commoditise.
HALO points investors towards moats they can touch, and in those settings, change often moves more slowly and tends to be more observable. However, there is danger. Heavy does not mean safe. Heavy assets can sometimes be the opposite of defensive and asset intensity can magnify mistakes. At the same time, light does not mean fragile. Some asset-light businesses enjoy genuine scarcity, whether through operating rights, bottleneck access, regulatory positioning, or deep embeddedness in mission-critical workflows.
HALO should not be treated as an allocation bucket but as a prompt, pointing us back to the question: what makes the cashflow durable when conditions change? AI is compressing the value of certain edges. When insight becomes cheaper and easier to replicate, business models built on information advantage, or very narrow technical differentiation, carry a different kind of risk. In response, the market is paying up for moats that are harder to copy.
AI is also a physical economy story: data centres, electrification, grids, cooling, equipment, transport, industrial capacity. The electricity grid powering a hyperscaler data centre is a better illustration of low obsolescence risk than any definition. Against that backdrop, low obsolescence risk is better understood as an underwriting preference, with investors favouring resilient cashflows.
That question, what makes cashflow durable when conditions change, is exactly what a disciplined Strategic Assets framework is designed to answer. It is what STAR Capital has been underwriting for years. Labels tend to lag reality and risk changes faster than classifications do. If you rely on labels for comfort, you can end up paying for the
appearance of defensiveness rather than the substance. STAR’s disciplined Strategic Asset test is designed to do one thing especially well: make it easy to say no. In simplified form, the gate asks whether what you are buying behaves like a Strategic Asset through cycles. Instead of buying “heavy”, you underwrite resilience directly.
If HALO is a repricing signal, then the task is not to chase the label. It is to avoid simplistic quality rotations that become expensive quickly. A better approach is to focus on assets that behave across regimes, with cashflow protection that can be explained simply and stress tested. Strategic Assets don’t need a label to justify the discipline, they need cashflows that hold when the label falls out of fashion.
When investors start paying more for resilience, they are rarely wrong about the direction of the instinct. They are often wrong about the shortcuts they take to express it.