The time for infrastructure investing is now
Decarbonization and digitalization drive infrastructure fundraising against a challenging macro backdrop.
With inflation moderating from peak levels, the focus has now shifted to sluggish economics; infrastructure assets with downside protection and recurring yield will outperform.
Infrastructure fundraising has had its challenges and fallen to its lowest level in over a decade. While capital has become more scarce, global megatrends such as decarbonization and digitalization still drive multibillion-dollar investment opportunities. AI, in particular, is expected to significantly reshape data center demand over the next decade by driving an exponential increase in computation requirements, leading to construction of larger and more power data centers to handle the large processing and storage needed.
The sector has demonstrated resilience through economic cycles, as well as high growth driven by societal demand. However, infrastructure (both private and listed infrastructure) comprises only a small portion of investor portfolios but we believe that will grow in the years ahead.
Also featured in this month's edition:
Investing in overseas as well as domestic real estate markets offers investors the potential for higher risk-adjusted returns, diversification and liquidity.
E-trucking is expected to grow in the coming decade. Logistics assets that generate solar electricity for charging and other operations can outperform.
Check back here next month for a new edition of IM Informed.