Infrastructure Performance by Region: Is It Really All the Same?

Dispersion of Infrastructure Returns by Geography

The majority of private markets infrastructure funds focus on three regions: Global, North America and Europe, with 75% of transactions taking place in these regions in the first half of 2024. When looking at performance, returns are the same across each region, performing exactly how we would expect for?infrastructure: mid-to-high single digits on the low end and low-to-mid teens on the high end. If the returns are all the same, does it really matter where you invest?

The answer is in the details. Although returns by region are nearly identical, the low correlation of returns between each region makes it highly beneficial to diversify investments across them.?Infrastructure’s global nature and specific regional needs create a unique and attractive investment set across geographies regardless of economic cycles or regulatory environments. The low correlation between regions shows that a diversified geographic strategy can smooth volatility and deliver consistently strong performance.

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Definitions

Infrastructure – An investment strategy that invests in physical systems involved in the distribution of people, goods, and resources.