II100: Infra’s top investors sound off

We asked all 100 firms about the challenges they had to overcome this year and what worries them as 2022 approaches. Here is what some of them said.

What is the biggest challenge you overcame in 2021?

Partners Group
Todd Bright, partner, head of private infrastructure, Americas

The biggest challenges we faced in 2021 were the high valuations and intense competition for assets that marked the infrastructure environment. We continue to focus on above-average growth segments that benefit from transformative trends and then seek out assets with true infrastructure characteristics: hard assets with long-term contracted cashflows and high barriers to entry.

QIC
Ross Israel, head of global infrastructure

Our greatest challenge was investing capital at a time when on-the-ground due diligence was impossible. Leveraging the strong local relationships of our teams on the ground in our five offices and investing in sectors where we have deep domain experience saw us overcoming these challenges.

Vauban Infrastructure Partners
Mounir Corm, deputy CEO and founding partner

In 2021, one of our biggest challenges, as for most essential infrastructure asset managers during the covid-19 crisis, was to continue providing essential services to populations despite brutal activity stops and global lockdowns. Consequently and simultaneously, the challenge associated with the rapidly increased need for digitalisation of infrastructure assets became even more evident during the pandemic.

Vision Ridge
Reuben Munger, managing partner

The largely virtual nature of interactions throughout 2021 challenged us to find ways to truly connect with potential LPs, management teams and each other.

Ancala Partners
Spence Clunie, managing partner

Managing our existing investments and making new ones in the face of changing covid-19 restrictions. At the portfolio level, we reduced costs and provided flexibility to the workforce to ensure the continuous smooth operation of the companies. Additionally, sourcing and developing new bespoke investments took longer, and flexibility was required from both Ancala and vendors.

GI Partners
Mark Prybutok, managing director and co-head of the GI Data Infrastructure Fund

We believe that face-to-face interactions are critical for creating real trust and buy-in across teams, especially given our collaborative, active-engagement style of value-add investing. Frequent and in-depth, in-person investment strategy and business planning sessions with our GI Data Infrastructure investment teams, portfolio company management teams and acquisition targets have not been easy to co-ordinate in 2020 and 2021, but we have been fully committed to making them happen and doing it safely.

What is your biggest concern for 2022?

DWS
Hamish Mackenzie, head of infrastructure

To make European power more affordable we need an acceleration of decarbonisation. Today, too much capital is still flowing into traditional large core infrastructure, while it is becoming increasingly evident that decarbonisation policies are contributing to a rapid shift of investment needs towards core-plus and value-add infrastructure strategies capable of financing this energy transition.

Macquarie Asset Management
Ben Way, group head

We recognise that our people have faced an extended period of stress, uncertainty and change as a result of covid-19. As we move past this crisis, we must not lose sight of the pandemic’s ongoing impact on mental health and physical wellbeing. We are encouraging all our people – whether they be investors or running portfolio companies – to prioritise their wellbeing. And we are helping provide the space and resources for them to
do so.

Foresight Group
Nigel Aitchison, head of infrastructure

Our biggest concern for 2022 is that governments will fail to bring in changes that are bold enough to tackle catastrophic climate change. Governments urgently need to implement well-structured policies across agriculture, transport and heating to speed up decarbonisation. We look forward to playing a key role in creating opportunities for investors to support and profit from this transition to sustainability.

Ardian
Mathias Burghardt, head of infrastructure

Climate change is an inescapable truth. Shifting the global energy system from its dependency on fossil fuels to more renewable, sustainable forms of energy is the greatest challenge facing the world today. We urgently need to accelerate the energy transition and reduce the carbon output of energy-intensive sectors.

Antin
Mélanie Biessy, COO

We spend a significant amount of time thinking about stranded assets. That is top of the mind when we consider an investment and we are constantly reviewing scenarios as we evaluate sectors. What is essential today may not be essential tomorrow. We cannot claim to predict the future, but we can study and assess the underlying trends to attempt to draw conclusions. In 2022, this review process will be all the more important as the year is likely to carry forward many of the established or emerging fundamental shifts from 2021 and 2020.

SUSI Partners
Marius Dorfmeister, co-CEO and global head of clients

While the redirection of capital from the fossil towards the green economy is progressing, it is not doing so fast enough to meet the climate targets set forth in the 2015 Paris Agreement. In 2022, we hope to see more decisive short-term action from all sectors, but particularly from the financial sector, to adequately address one of the most significant challenges of our time.

Instar Asset Management
Morty White, managing partner

The trends we’ve seen emerge and accelerate over the last two years are likely to continue into 2022 with companies continuing to prioritise diversity, equity and inclusion, sustainable practices and technological integration. As a result, we have an opportunity to do things differently, and to strive for and accomplish change and progress in our business, for our people and for communities. There will be no going back to ‘business as usual’.

Ancala Partners
Spence Clunie, managing partner

The state of the European and global economies. We are seeing accelerating inflation combined with high debt levels for governments, corporates and individuals. Asset values have remained elevated despite these factors, and at some point we believe there will be a market correction.