After a tough macroeconomic period for private markets, infrastructure fundraising is finally rebounding. The share of GPs meeting their targets is on the rise and the average time on the road is also dropping. The shift to core-plus and value-add is another noticeable trend as investors seek strategies with higher returns and look to diversify against a backdrop of high market unpredictability.
Key trends in infrastructure strategies
Investors look to balance portfolios as core fails to deliver on returns.
Core puts up a fight
While core-plus goes from strength to strength, reports of core’s death have been greatly exaggerated.
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Three key trends in infrastructure strategies
Core-plus takes centre stage as investors eye rate cuts.
Pushing the envelope with new asset types
Investors are increasingly deploying capital in novel opportunities as infrastructure’s parameters continue to expand.
Playing for keeps in credit
The appeal of infrastructure debt will remain strong, no matter the pace of interest rate cuts in the near future.
Secondaries is a rapidly growing niche
What should investors consider when weighing up an allocation?
Plugging into the APAC hotspot
Asia-Pacific is by no means the biggest region for infrastructure investing, but it has been attracting more and more attention of late. What kinds of strategic opportunities did GPs snap up there in the first half of 2024?
Polish up your value creation
Decarbonisation dominates infrastructure investment these days. But when net zero goals are already baked in, what else can GPs do to generate value?
Goldman Sachs Alternatives on the new mid-market
From origination through to exit, the appeal of the infrastructure mid-market is clear, says Tavis Cannell, global head of infrastructure at Goldman Sachs Alternatives.
Northleaf Capital Partners: North America’s ‘Goldilocks moment’
Contracted infrastructure opportunities in the mid-market are ripe for investment, says Northleaf’s Jared Waldron.
Vauban Infrastructure Partners: The infrastructure core revolution is on
Gwenola Chambon, CEO and founding partner of Vauban Infrastructure Partners, sees changes reshaping the management of Europe’s core infrastructure assets.
Partners Group on finding value in secondaries
The mid-market for infrastructure secondaries is home to some appealing opportunities, say Dmitriy Antropov and Marc Meier, co-heads of infrastructure partnership investments at Partners Group.
Through turbulent times, Infrastructure has prided itself on being a resilient asset class. But that does not mean that the volatile macroeconomic environment is not being felt. The selection of strategies is key in today’s market; building resilience into portfolios using the right investment opportunities. Infrastructure Investors will always need to be ready for the next move, and it will take a combination of intuition and market awareness to get ahead of the headwinds.
How infrastructure investors are rethinking strategy
Not all strategies are created equal, as rising interest rates see investors turning to core-plus and value-add
Vauban on redefining the longevity of infrastructure
Infrastructure is a long-term asset class and requires a different approach to a PE-orientated one, says Vauban Infrastructure Partners’ Mounir Corm.
Core’s cause for concern
Investors may value the resilience and inflation linkage of core infrastructure, but high interest rates mean that fundraising in the sector is challenged.
PATRIZIA on the balancing act between risk and reward
Investors are taking a binary approach to protect from downside risk and add value, says PATRIZIA’s managing director of infrastructure Tom Maher.
Infrastructure strives to weather the storm
Market turbulence has hit fundraising, but managers remain bullish on the future of the asset class.
LPs set their sights on infra debt
Investors are increasingly bullish on infrastructure debt and secondaries.
Expert view: Whether to diversify or specialise your fund
Three infrastructure experts share their insights on the relative merits of a diversified investment approach.
Northleaf: Diversification is key in volatile times
Diversified portfolios with minimal leverage are well-placed to thrive amid market volatility, says Northleaf’s Jamie Storrow.
The north is king of European infrastructure
A plentiful supply of green power is attracting investors into a growing range of infrastructure assets.
LPs prioritise rebalancing portfolios amid market uncertainty
Market volatility may have increased denominator effect concerns in recent months but infrastructure allocations are still trailing targets.
Instar: Putting people at the heart of infrastructure
Infrastructure investors have the opportunity and responsibility to create long-term value by engaging with, and meeting the needs of, communities, according to Instar Asset Management’s Gregory Smith.
Infra reclaims ESG
Despite some recent debate over the pros and cons of ESG-related investments, the long-term outlook indicates strong financial backing will continue
Partners Group on building a resilient portfolio
A thematic approach to investment opportunities combined with the construction of diversified portfolios can generate attractive risk-adjusted returns in any macroeconomic environment, say Partners Group’s Irene Mavroyannis and Ed Diffendal.
Infra co-investments are in vogue
Demand remains high for infrastructure co-investments, but will appetite hold against a more challenging macroeconomic climate?
Infra experts share their market predictions
Three industry specialists discuss which strategies they expect will attract the most attention and appetite among investors over the coming year.
In a time of considerable macroeconomic uncertainty, the infrastructure industry should fare better than most thanks to its inherent defensive characteristics. But investors are also busy making plans to futureproof their portfolios far beyond the current macro storm, which increasingly include specialisation, diversification and a focus on sustainability. In this report we take a closer look at the strategies that are shaping the asset class’s future.
How infrastructure investors are riding the macroeconomic wave
With recession on the horizon, investors look beyond the ‘safe-haven’ of core infrastructure to safeguard their portfolios
Vauban: All eyes on core
Core infrastructure investing should be at the forefront of every investor’s mind, says Vauban Infrastructure Partners’ founding partner and deputy CEO Mounir Corm.
The future of specialisation
Whether in terms of sector, geography or strategy, LPs are increasingly looking to deepen the specialisation in their portfolios. Does this spell the end for the generalist fund?
Stafford’s McPhee: A bright future for infra secondaries
Secondaries represent all of infrastructure’s most attractive characteristics, but with added benefits, says Stafford Infrastructure’s Matthew McPhee.
Northleaf on the case for diversification
A global pandemic and now rising inflation have reinforced the importance of portfolio theory, says Northleaf managing director and head of infrastructure Jamie Storrow.
Greening the brownfield
Energy transition investments may be prioritising renewables capacity, but emerging specialist funds say that decarbonising existing assets is a key part of the value creation arsenal
PATRIZIA on the endurance of high-yield infra debt
Throughout the economic cycle, high-yield infrastructure debt generates returns comparable with equity and with very low risk of loss, says Alexander Waller, head of infrastructure debt at PATRIZIA.
LPs are hungry for more infra
Investor appetite for infrastructure should withstand the global economic headwinds, but the more resilient strategies will draw in the capital.
FIRSTavenue on entering a new phase
ESG-linked economics, the proliferation of secondaries and open-ended funds and the rise in stratification – FIRSTavenue CEO and managing partner Paul Buckley describes his vision for the future of the asset class.
On the minds of the strategy heads
Three infrastructure experts share their strategy for success in a fast-evolving asset class
Options from the core palette remain popular with LPs, but a growing number are being drawn to niche plays. Debt and secondaries are grabbing more of the limelight. And value-add and opportunistic are growing in popularity for investments in renewables and digitisation. The resilience of these sectors in troubled times is now proven, so it is very much ‘risk-on’ when it comes to these segments.
Stars are aligning for green infrastructure debt, says Macquarie
Unprecedented dealflow in the renewable energy sector is coinciding with soaring demand for responsible investment, according to Macquarie Asset Management’s Tim Humphrey and Dillon Anderiesz.
Why infra debt is on the rise
Once considered a niche by investors, infrastructure debt has become an important part of LP allocations, both in the infra and private debt space.
Northleaf on diversifying through the mid-market
A mid-market investment strategy allows managers to access under-the-radar assets, but sell into a highly competitive environment, says Jamie Storrow, co-head of Northleaf Capital Partners’ infrastructure programme.
Why investors remain loyal to core strategies
Traditional core remains central to LP strategies, for now. But with risk appetite growing, the pursuit of higher-yielding investments is spiking interest in other approaches, writes Tom Higgins.
Partners Group: Embrace transformative trends to find value-add
Investing behind the giga-themes of digitisation, decarbonisation and new living will keep Partners Group on the right side of disruptive change, says the firm’s head of private infrastructure in the Americas, Todd Bright.
Open to playing a longer game with open-end infra vehicles
What is driving some investors to allocate to longer duration open-end infrastructure vehicles?
The art of the sustainable transition according to Infracapital
The sustainability agenda is creating myriad opportunities for traditional, diversified infrastructure strategies, say Infracapital co-founders Ed Clarke and Martin Lennon.
The rise of secondaries in infra investing
The market is primed for further growth, despite some scepticism over managers’ ability to secure quality assets at a discount.
The secondaries market of tomorrow for infra investment
Mark Benedetti and Vladimir Colas, the co-heads of Ardian US, explain what is fuelling the surge of interest in infrastructure secondaries.
Under the hood of infra strategies with EDHECinfra
EDHECinfra director Frédéric Blanc-Brude on how to define and understand core, core-plus, opportunistic and mid-market infrastructure.
Door opens to more infra investing
A new quota system in Germany’s biggest state will encourage greater institutional exposure to the asset class. But there’s room to go further, says Florian Martin, managing director of KGAL Investment Management.
Infrastructure investors know there is correlation between risk and reward, and that core, value-add and opportunistic strategies target different parts of this risk/reward spectrum. Where the boundaries are to be found – and whether these terms carry the same meanings as they did just a few years ago – is far less clear and is explored in our 2020 Strategies report.
What’s in a (strategy) name?
The pandemic has laid bare the inadequacies of risk terminology in infrastructure. Investors and managers must look beyond labels to weather this storm.
Three key trends in infra strategies
Infrastructure remains a strong asset class, even as the old orthodoxies about 'core' and 'non-core' are being swept aside.
HSBC: Debt strategies gain interest
For long-term investors squeezed between intense volatility and low interest rates, infrastructure debt offers the prospect of yield combined with relative long-term security, say Glenn Fox and Shantini Nair from HSBC
A hostile environment for core
UK regulatory price controls threaten companies’ ability to secure financing, argue Tim Briggs and Silke Goldberg, partners at Herbert Smith Freehill.
Infrastructure’s changing landscape
Infrastructure investing has come a long way in little time and strategy definitions have become more fluid as the industry evolves.
Golding Capital on co-investment
Understanding both underlying business models and co-investment structures is key, says co-head of infrastructure at Golding Capital Partners Fabian Pötter
Infracapital: Covid-19 can catalyse greenfield growth
Infrastructure investment can be a key area of stimulus for flagging economies, says Andy Matthews, greenfield managing director at Infracapital
Focusing on operations to cut risk
Managers have the tools to increase returns by changing the way they approach risk, argues AMP Capital’s global infrastructure principal Adam Ringer.
Super-core: Marketing label or innovative strategy?
Brookfield and Macquarie have raised billions in the past two years for their new super-core funds. But are these strategies really different from core vehicles or just a new form of labelling?
Arcus on value-add investing post-covid
The crisis is accelerating infrastructure’s transition into a ‘new normal’. Identifying businesses that can capitalise on this is the key to value-add investing, says Simon Gray, co-managing partner at Arcus
Time to think twice on infra secondaries?
Kempen Capital Management’s director, private markets, Marvin de Jong, warns that the covid-19 crisis is not a re-run of 2008.
The new niches in infrastructure
As strategy labels blur, Elizabeth Pfeuti explores the new areas that infrastructure investors are investigating – and where they fit in.
‘The mid-market matters,’ says Ancala
The rapid growth of many larger infrastructure funds can overshadow what is happening in the mid-market. Ancala Partners’ Spence Clunie discusses the opportunities in this market
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