PErspectives | Calm in the Storm: Investing in Infrastructure

Welcome to Issue No. 10 of PErspectives—our periodic publication featuring news, trends and legal developments in the private equity (PE) industry. In this piece, we examine the drivers of growth in the PE infrastructure space and why the asset class appeals to investors in this uncertain macroeconomic environment. We also take a look at the broadening remit of PE infrastructure investing and the objectives behind the different investment strategies.

Infrastructure fundraising and debt markets have remained open for business, ensuring that capital has been available for deals even as wider capital markets have tightened. In this inflationary, high interest rate environment, infrastructure assets have provided stability and protection for investors amid a broader push for energy transition and focus on ESG.

With a view to how these developments are impacting PE stakeholders, we explore these and other critical questions:

• Why are PE infrastructure investors moving beyond the traditional areas of utilities, airports, toll roads, etc.? How are PE investors now defining infrastructure and its subsectors?
• How do investors see the range of infrastructure strategies, and what they are looking for from infrastructure managers?
• How is the hype around energy transition and ESG influencing investor appetite?
• What are the underlying drivers of M&A activity in the infrastructure space?
• How are infrastructure sponsors funding deals, what is the cost of capital, and who are the core providers of infrastructure debt?
• What is the outlook for infrastructure deal and fundraising activity levels going forward?

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