Cross-border investment flows shape the modern global economy, driving growth, innovation, and strategic partnerships. By tracing the movement of capital—from equity stakes in emerging markets to data center developments in advanced economies—we gain insights into where opportunities and risks converge.

Global Trends in FDI (2024–2025)

Global foreign direct investment (FDI) experienced a notable contraction, falling 11% to $1.5 trillion in 2024. This downturn continued a two-year decline, highlighting the challenging environment for cross-border capital. In the first half of 2025, FDI flows totaled $663 billion, down 6% year-on-year—buoyed by a surprising 18% rise in Q1 but offset by a 38% drop in Q2.

This volatility reflects broader economic headwinds: rising trade barriers, inflationary pressures, and fiscal tightening. The OECD area saw inflows shrink by 4% in H1 2025, driven in part by equity disinvestments and reduced earnings reinvestment in Ireland. Meanwhile, the United States led equity FDI recipients with $46 billion, followed by Canada ($22 billion) and the United Kingdom ($18 billion).

Greenfield investments—particularly in manufacturing and AI infrastructure—remained a bright spot. Advanced economies attracted three-quarters of greenfield FDI announcements between 2022 and May 2025, signaling continued investor appetite for new physical projects.

• Global FDI down 6% in H1 2025 ($663 billion)
• U.S., Canada, U.K. top recipients of equity flows
• Greenfield projects peak in advanced economies

U.S. Treasury International Capital (TIC) Data

The U.S. Treasury International Capital (TIC) dataset reveals shifting portfolio investments into long-term securities. From June 2024’s peak net private inflows of $1,635.6 billion down to March 2025’s $146.8 billion, the pattern underscores volatile foreign appetite for U.S. assets. April 2025 saw a rare net outflow, followed by an equities-driven rebound in May.

Short-term holdings like Treasury bills also fluctuated, while bank liabilities swung dramatically. Official inflows in June 2025 reached $70.5 billion, even as total portfolio inflows settled at $77.8 billion. Such movements reflect global investors’ search for yield and safety amid uncertain markets.

U.S. Commercial Real Estate Inflows

Cross-border investment in U.S. commercial real estate (CRE) surged 130% year-on-year in Q1 2025 to $2.4 billion. This rebound reflects renewed global confidence in U.S. property amid stable yields and growth prospects.

Key sectors included hospitality, where UK investors poured $284 million—driven by a £141 million acquisition of a PGA National Resort. Multifamily assets saw $800 million in inflows, down 23%, while retail assets contracted. Industrial properties, especially logistics hubs and data centers, garnered strong but unspecified volumes.

Top source countries for Q1 were Canada (35% of inflows at $7.3 billion), Norway (13%), the UK (11%), and Japan (10%). Secondary U.S. markets like Reno, Nevada—popular for ports and data centers—and Sun Belt logistics corridors gained traction as investors sought diversified exposure.

Regional and Bidirectional Flows

Transatlantic investment remains a two-way street. European investors continue to acquire U.S. financial assets, while U.S. firms invest in Europe via equity and fund shares. From January to July 2025, UCITS funds recorded €125 billion in net flows into international and European equities.

Emerging sources like Mexico are accelerating outbound capital, fueled by maquiladora build-to-suit projects and EB-5 activity. German investors, though risk-averse at home, maintain stable trust in foreign markets, reinforcing their role as reliable counterparties.

Drivers, Risks, and Sector Niches

Cross-border investors weigh multiple factors when allocating capital. The most influential drivers include:

• Political and economic stability in host countries
• Growth in onshoring and supply chain resilience
• Demand for data centers and AI infrastructure
• Availability of affordable land and incentives

Conversely, tight financing conditions, tenant-favoring market dynamics, and a slowdown in M&A can dampen investment enthusiasm. Yet, specialized niches continue to attract capital:

• Hospitality resorts with long-term leaseback structures
• Industrial concessions offering occupancy guarantees
• Life sciences sale-leaseback models for lab spaces

Outlook and Strategic Insights

Despite global FDI declines, the United States remains a pillar of cross-border investment resilience. Its deep capital markets, robust legal frameworks, and innovative industrial base continue to draw foreign investors seeking both security and growth.

To navigate volatility, stakeholders should prioritize:

• Diversification across regions and sectors
• Active monitoring of policy shifts and trade barriers
• Engagement with local partners to unlock market nuances

By aligning investment strategies with emerging trends—such as AI infrastructure, greenfield manufacturing, and sustainable real estate—investors can position themselves to capitalize on the next wave of global capital flows.

In a rapidly evolving landscape, decoding the complexities of cross-border investment flows empowers both policymakers and private sector leaders to foster economic growth, innovation, and resilient networks across borders.