Infrastructure

Exposes portfolios to long-lived, regulated assets (e.g. utilities, transport), offering inflation-linked cash flows or targeted capital growth.

What is Infrastructure?

As an asset class, infrastructure encompasses the essential physical assets and systems that support the functioning of our economies and daily lives. It forms the backbone of modern society, enabling everything from transportation, energy and power, water supply, and the networks that keep us connected. Traditionally, infrastructure has been financed and operated by the public sector (i.e., governments); however, private capital is playing an increasingly significant role in the development, operations, and management of infrastructure assets. Infrastructure investments offer investors the opportunity to participate in the ownership and operation of these physical assets, providing potential for attractive risk-adjusted returns and diversification benefits.

Why consider Infrastructure for your portoflios?

Infrastructure asset revenues often feature embedded growth and are linked to inflationary increases through contractual indexing or natural links to inflation, ensuring long-term stability. Additionally, the essential nature of infrastructure services often results in inelastic demand, irrespective of price increases.

Infrastructure investments tend to exhibit a low correlation with traditional asset classes, such as stocks and bonds, and private assets, particularly over the long term.

Infrastructure assets often exhibit defensive characteristics, which make them particularly valuable during economic downturns or periods of market stress. The essential nature of infrastructure services means that demand remains relatively stable even in challenging economic conditions.

The essential nature of infrastructure has historically helped drive the compelling risk/return profile of the asset class. Modern infrastructure presents the opportunity to achieve meaningful upside by capitalizing on long-term trends that significantly transform how people live and conduct business.

Infrastructure has historically protected against the downside

Maximum drawdowns, Q4 2002 to Q3 2024 Data as of September 30, 2024. Source: Pitchbook, Bloomberg.

Infrastructure has historically outperformed other asset classes

Cumulative performance, Q4 2002 to Q3 2024
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