Infrastructure investment is surging, having shown its resilience during the pandemic.
It is also seen as a possible substitute for some fixed income allocations at a time when the negative yielding debt exceeded $16.5 trillion at the beginning of August.
Many strategies within infrastructure are also focused on sustainable investment strategies through renewable energy and other energy-transition initiatives, which will meet the ESG requirements of institutional investors, particularly in Europe.
The pandemic highlighted the desperate need for improved digital infrastructure and specialist funds are attracting big money.
One of the largest is run by Copenhagen Infrastructure Partners, which closed its fourth fund in April at $8.2 billion, having exceeded its target by $2.9 billion.
The other is run by DigitalBridge Group, which has yet to close its second fund, despite having raised more than $6.6 billion.
The pattern of lots of money chasing sustainable infrastructure strategies was repeated when Stonepeak’s new renewable energy focused Global Renewables Fund hit $2.75 billion and closed in July, two and a half times its original target.