Infrastructure: Investing for the Future
In 2025, the ability of infrastructure managers to attract capital in new and emerging environments depends on how effectively they respond to six major forces reshaping the market: decarbonisation, digitisation, deglobalisation, inflation risk, asset class maturation, and sectoral diversification.
Macro Trends Reshaping Infrastructure and Fundraising Implications
1. Decarbonisation and the Net Zero Push
Governments across the world are under pressure to meet net zero commitments. As a result, there is massive demand for capital to fund clean energy, grid modernisation, low-carbon transport, and carbon capture technologies.
Implication for fundraising: Investors — particularly large institutional ones such as super funds and global pension funds — are allocating more capital toward climate-aligned investments. Infrastructure funds with a strong sustainability thesis, credible ESG frameworks, and exposure to energy transition assets (e.g., wind, solar, battery storage, green hydrogen, and renewable fuels) are more likely to win mandates. The flip side: funds with legacy fossil fuel exposure may face capital flight or require stronger transition plans.
2. Digitisation and the Rise of Data Infrastructure
As the world becomes increasingly digital, the demand for data infrastructure has exploded. AI adoption, cloud computing, and remote work trends are creating sustained demand for data centres, fibre networks, and digital logistics platforms.
Implication for fundraising: Digital infrastructure is now viewed as an essential service akin to utilities. Infrastructure funds that can offer exposure to core-plus or growth-stage digital assets are highly attractive to capital sources seeking long-term growth and inflation protection. Additionally, funds that use AI and digital tools to enhance asset management performance may gain a competitive edge with tech-savvy investors.
3. Deglobalisation and Sovereign Resilience
Rising geopolitical tensions, from U.S.–China rivalry to European energy security and regional instability, have prompted countries to reassess their critical infrastructure dependencies. There's a growing push to move to onshore manufacturing, secure energy supply and protect strategic infrastructure.
Implication for fundraising: Funds investing in assets that support national resilience - such as domestic energy production, port logistics, defence infrastructure, and advanced manufacturing hubs - are likely to align with government priorities. This can open the door to public-private partnerships (PPP), concessional financing, or access to strategic capital pools (e.g., sovereign wealth funds). In contrast, funds with exposure to foreign-sensitive or geopolitically risky assets may face investor hesitation.
4. Inflation, Interest Rates and Market Volatility
Infrastructure is traditionally seen as a hedge against inflation, thanks to the regulated or contracted revenue streams many assets offer. However, rising interest rates have made capital more expensive and reduced the relative appeal of long-dated, illiquid investments.
Implication for fundraising: While the higher cost of capital has made fundraising harder in the short term, infrastructure’s defensive qualities and inflation linkage remain attractive to many investors. Debt strategies, particularly, are gaining traction — especially those offering floating-rate exposures or short-duration investments. Funds with strong risk-adjusted returns, lower leverage, and proven inflation passthrough mechanisms will have an edge.
Overall, infrastructure has firmly re-entered the spotlight for investors — but not without its challenges. While the long-term fundamentals of infrastructure remain compelling, the capital-raising environment has become more complex. Funds are navigating shifting investor expectations, macroeconomic volatility, geopolitical risk, and rising competition for capital.
Where will this lead fundraising for the rest of 2025? More to follow……
