Candriam is transforming its Global Metaverse Fund—originally focused on companies developing the metaverse—into a tech fund centered around AI, cybersecurity, and other trends. It marks a clear sign that the tech hype of 2022 has fully fizzled out.
Let’s rewind to October 2022. Just a year after Facebook rebranded to Meta, Candriam launched its Global Metaverse Fund with great fanfare. The fund aimed to invest in companies helping to build the metaverse—the 3D internet that would allow everyone to enter a virtual life via headset.
“One of the most exciting developments in tech,” fund manager Johan Van Der Biest proclaimed at the time. “Although still in its early stages, it’s already clear that its development will drive the entire tech sector. This could spark a revolution in education, healthcare, communication, and entertainment.”
New strategy, new name
Barely two and a half years later, little remains of that initial enthusiasm. Candriam is changing the fund’s investment strategy to target eight broader tech trends and is renaming the fund—currently managing 352 million dollars in assets—to the more neutral-sounding “DigiTech,” as revealed via Belfius. Candriam’s metaverse fund serves as the master fund for Belfius’ Virtu=all fund, which will also be renamed, to “Digit=All,” following the shift in strategy.
Among the eight trends, the metaverse is no longer explicitly included—at most, it appears indirectly. The new focus areas are AI, cybersecurity, automation software, superchips, ultra-fast internet, cloud infrastructure, next-gen devices, and energy-efficient green tech.
Why the change in direction? “Interest in the metaverse has dropped significantly. Many companies have shifted their focus from the metaverse to AI, where the return on investment is clearer,” says Van Der Biest.
Industry vs. consumer
The fund manager offers a nuanced response when asked whether expectations for the metaverse were too optimistic in 2022. “The industrial metaverse is still gaining traction—think of machine simulations via digital twins. But the consumer side never took off, apart from gaming. Even in 2022, we were skeptical about consumer applications: a virtual experience can never surpass a real one. That’s why we focused on industrial applications at the fund’s launch.”
A resurgence of the metaverse hype seems unlikely. “The focus for tech investors has shifted. AI now takes top priority. Unless clear consumer-facing applications for the metaverse emerge that can generate revenue, interest will remain limited,” Van Der Biest predicts. Candriam declined to comment on its view of Meta as an individual stock.
Index shift
The original metaverse fund also invested in non-tech sectors like luxury goods and healthcare—reflecting the hoped-for broad societal impact—and even managed to outperform the MSCI All Country World Index. The revamped fund will now focus exclusively on tech. As a result, the benchmark will shift to the MSCI World Information Technology Index.
Candriam is not alone in pivoting. Invesco, which also launched a thematic Metaverse Fund in June 2022, expanded it in January 2024 to include AI, renaming it the Metaverse and AI Fund.