Episode summary
ALTSLA 2026: Sandeep Bhagat of Whittier Trust Company Spoke to Courtney McQuade
Summary
Sandeep Bhagat said 2026 has already brought two major shocks: renewed geopolitical risk centered in the Middle East and a fast-moving debate over artificial intelligence. He argued that this conflict is different from a typical market scare because it threatens physical assets such as energy infrastructure and power grids, creating risks that extend beyond inflation, interest rates, and the usual bond-stock reaction.
On AI, Bhagat focused on the downside scenario as much as the upside. He said the big concern is that machine intelligence could displace human labor and disrupt the long-standing balance where capital gains from higher productivity while workers benefit from wage growth. He described a scenario in which U.S. unemployment could reach 10% in a few years, which he called potentially devastating.
Bhagat said the practical response is diversification rather than concentration, especially because software and private credit could be exposed if parts of the software industry become obsolete. He said the conference takeaway was to keep allocations broad, capture AI-linked productivity opportunities, and avoid being positioned to absorb the full downside of a sharp labor-market shock.
Key takeaways
- Bhagat said the Middle East conflict is a market shock because it threatens physical assets like energy infrastructure and power grids, not just inflation and rates.
- Bhagat warned that AI could displace labor and cited a scenario where U.S. unemployment could reach 10% in a few years.
- He said software is one of the industries most at risk of obsolescence, which could ripple into private credit loans made to those companies.
- Bhagat’s main portfolio response was diversification, so investors are not overly exposed to one narrow sector or to the full downside of AI disruption.
Notable quotes
“this shock to the system will leave us with a financial crisis that just goes beyond inflation, interest rates, and the bond and the stock market”
“physical assets are being attacked, energy, infrastructure, power grids, and the world doesn't have a whole lot of experience with physical risk”
“one of the industries at risk of almost obsolescence from the replacement of humans by machines is in the software industry”
“the panelists who use it said that they their counter to this risk is to just diversify”
“the unemployment being contemplated in the US is as is as large as 10% in a few years”
How the episode opens
Hi, I'm Courtney McUade with Markets Group here with Sandep Bagot, chief investment officer of Whittier Trust. Closing the door number two, we'd like to get started on time for the final grouping of the afternoon before we go on to cocktail, wine, and beer. If they're welcoming their way out of the middle room into the general session, they might get started. Okay.
Okay. — I'm good. — Okay. — And am I looking at you when we talk? — Yes. Think like like it's a fireside chat. We're on stage and that's our audience. — Okay. — Is that okay? — But I do I need to look there every now and then.
Yeah, I would a little bit. — So they feel involved. — Yes. Exactly. — 3. Hi, I'm Courtney McUade with Markets Group here at our Alts LA. With me is Sandeep Vagot, chief investment officer at Whittier Trust. Sandep, it's great to see you.
It is so nice to be here almost year in and year out. I think I've been doing this for six or seven years now.
You are a repeat visitor and we're so glad you're here. Delighted to be here and it's actually a very timely occasion because look 2026 has just started. We're barely 2 months into the year and yet we have had two significant jarring events.
So let me headline them. Of course we have geopolitical risk and then there are a whole bunch of question marks on artificial intelligence. So, first things first, normally geopolitical events make for great drama and theater, but rarely have a big impact on the markets and the economy.
But this one is different. It is centered in the Middle East. War has broken out.
So, with that comes the sad collateral damage of human tragedy.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- geopolitical risk
- ai downside risk
- portfolio allocation exposure
- physical assets and infrastructure
- capturing ai upside
Companies and tickers mentioned
- Whittier Trust Company
Watch the episode
Watch “ALTSLA 2026: Sandeep Bhagat of Whittier Trust Company Spoke to Courtney McQuade” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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