Today, the backdrop for real assets has reset. Growth is returning, but in different parts of the market than many investors remember. While in the post-pandemic period performance was defined by scale, now it is the result of adaptability and having access to a broad array of organization sizes and business plans.
Geopolitical volatility is not only increasing investor demand for infrastructure assets; it is urgently reshaping where and how capital is deployed. As energy security, supply chain resilience, and digital sovereignty rise up policy agendas, infrastructure investments that expand capacity and relieve bottlenecks are becoming critical.
Interest rates are undergoing one of the steepest reversals in half a century. In 2020, governments could borrow for 30 years at just over 1%. Fast forward to 2025 and U.S. 30-year yields have risen above 5% for the first time since 2007.
More institutional investors are exploring infrastructure for diversification, income and stable return potential as well as inflation protection. Investors are looking at both the traditional segments and newer digital sectors along with renewables.
With the world economy still recovering from the COVID-19 pandemic and now dealing with the Ukraine-Russia crisis, markets face a great deal of uncertainty.
Does exposure to unlisted infrastructure benefit the average portfolio?
