March 5, 2025: The Infrastructure Investment Opportunity

What comes to mind when you think of infrastructure is probably roads, bridges, and power plants. While these certainly fall under that category, infrastructure is much more than that. It includes green energy projects like solar panels and EV charging stations, digitalization investments such as data centers and cell towers, transportation assets including airports and seaports, and social infrastructure such as schools and hospitals. More generally speaking, infrastructure can be defined as businesses providing essential products and services backed by hard assets with long-term contracted cash flows in markets with high barriers to entry.

Infrastructure has grown rapidly as an alternative private asset class. Although high interest rates have led to slower fundraising in recent years, private infrastructure currently has $1.3 trillion in assets under management and is expected to increase by another trillion by 2029.¹

Fueling this growth is the massive gap between projected and required infrastructure spending. The American Society of Civil Engineers estimates a $3.7 trillion infrastructure funding gap in the U.S. between 2024 and 2033.² On a global scale, the G20 Infrastructure Outlook estimates a $15 trillion gap in global infrastructure funding by 2040.³ With government budgets coming under pressure due to high deficits and interest rates, more private sector investment is needed to fill this gap. This creates an exciting investment opportunity in private infrastructure over the next 10+ years.

Weekly Market Update: March 5, 2025

¹ iCapital. “Alternatives Decoded.” Accessed at https://learn.icapital.com/alternatives-decoded
² American Society of Civil Engineers. “Report Card for America’s Infrastructure”. Accessed at https://infrastructurereportcard.org/economics
³ Global Infrastructure Hub. “Infrastructure Outlook.” Accessed at https://outlook.gihub.org