3D View: The 3 Megatrends Shaping Infrastructure
These trends – which, in turn, open up thematic discussions around energy transition, and data/digital infrastructure developments (i.e. fiber optics, 5G towers, data centers) – have been an important feature at IPEM’s last two events: IPEM Paris (September 2023), and IPEM Cannes (January 2024). IPEM’s Infrastructure Summits bring industry experts together – both GPs and LPs – to present industry data and discuss the latest asset class developments. As such, they give delegates a great opportunity to delve deep into the details and ensure the right questions get addressed. Over the last two years, an array of leading organizations have taken the stage, including:
● Arclight Capital Partners
● Aon
● AXA IM Prime
● Eiffel Investment Group
● Vauban Infrastructure Partners
One of the key takeaways from the last two summits is that the ‘3D’ megatrends will open up the need for continued private investment over the coming decades. Funding gaps in the middle market, in particular, are likely to provide plenty of deals for investors to pursue, and drive operational improvement.
With inflation rising alongside interest rates, infrastructure has continued to expand in recent years. European core infrastructure investment has grown from approximately EUR26 billion in 2009 to EUR150 billion today. There is an optimistic feeling among institutional allocators on how infrastructure allocations will progress over the next few years given how resilient the asset class has proven to be across economic cycles. Not to mention its strong de-correlation to equities, and its ability to offer an effective long-term hedge against inflation.
This has supported strong fundraising (though 2023 was an exception), with overall dry powder growing from $275 billion in 2020 to $339 billion through January 2024.
