The infrastructure asset class is experiencing tailwinds from secular megatrends including decarbonisation and the energy transition, digitalisation and the growth in data and AI, with the energy and utilities sector alone requiring an estimated €1 to €4 trillion of infrastructure spending by 2030 to achieve a commitment to carbon neutrality by 2050.
The European market remains at the forefront of these megatrends, as the home to leading infrastructure corporate groups, such as Veolia, Vinci, Hochtief, Ferrovial according to fund manager, Access Capital Partners.
This market remains the largest globally by annual number of transactions, with mature regulatory and legal frameworks, with a strong mid-market opportunity, says Tomas Wegelius, partner infrastructure at Access Capital Partners.
“The market remains a healthy ecosystem, with around 150+ established general partners (GPs), alongside the emergence of smaller, newer, GPs each year with more specialised, niche strategies.”
Additionally, he says, the European infrastructure market is considered the most active and diversified infrastructure market globally.
“Comprising of over 30 countries with different infrastructure frameworks and different investment needs across key sectors such as fibre networks, road networks, waste and water solutions, Europe provides a very large mid-market opportunity, with market fragmentation creating compelling consolidation opportunities.
“The European market benefits from mature regulatory and contractual frameworks, with the increasing integration of the EU market and reduction of unjustified monopolies.
“Currently, the market is witnessing strong growth, from both the requirement to upgrade existing systems, and the development of new projects, with high public deficits creating a need for more private financing of infrastructure assets,” he says.
Secular megatrends are also providing huge investment opportunities.
“The digital infrastructure sector has witnessed rapidly increasing demand for bandwidth and telecommunications, 5G and fibre network deployment and data centres, in recent years. In 2024 alone, the world is expected to have generated 1.5 times the amount of digital data it did just two years ago, and this strong growth trend is expected to continue, underpinning demand for digital assets.
“In the energy and utilities sector, both the volume and diversity of renewable energy projects has been growing, with increased focus on flexible solutions such as battery energy storage. Given the decarbonisation commitments of both governments and businesses we foresee investment opportunities in this sector to remain attractive for the long-term.
“The transport and mobility sector has undertaken a major transformation due to increased urbanisation and the focus on flexible, green solutions. New mobility subsectors have emerged to support this transition, such as electric vehicles and charging networks, which in turn will require upgrades to grids and electricity distribution networks. Whilst the sector has traditionally focussed on assets such as toll roads, airports and ports, the shift to clean mobility will be a key focus of the coming years, creating significant new opportunities in the sector,” he says.
