- Over the past 10 years, private infrastructure assets under
management have more than quadrupled, to a record $1.3 trillion
- Investor interest in digital infrastructure is growing with
data center investments surging due to AI-driven demand
- Funds are evolving their strategies, leveraging new
investment structures and operational efficiencies to enhance
returns in a maturing industry
BOSTON, March 17,
2025 /PRNewswire/ -- Private investment in
infrastructure is regaining momentum, according to the latest
annual Infrastructure Strategy report by Boston Consulting Group
(BCG). The report, Infrastructure Strategy 2025: How Investors
Can Gain Advantage as the Asset Class Matures, details how the
private infrastructure market, which has been navigating
macroeconomic uncertainty and fluctuating deal volume, shows signs
of stabilizing and remains a safe haven in volatile times.
Infrastructure assets under management continued to grow over
the past year, reaching an all-time high of $1.3 trillion as of June
2024. Nevertheless, fundraising remains below its 2022 peak,
reflecting lingering investor caution. Meanwhile, deal activity,
although still below peak levels, is expected to increase as
sponsors seek to exit investments and reinvest capital.
Investment Trends and Sector Insights
The report highlights a shift in investor focus, with greater
allocations to high-growth sectors such as digital infrastructure
and energy transition. Data center investments, driven by AI and
cloud computing demands, have been particularly strong, with a
record $50 billion allocated to the
sector in 2024, up from just $11
billion in 2020. Despite a slowdown in deal flow across most
infrastructure asset classes, investors are optimistic about
long-term opportunities in core sectors such as energy, transport,
and logistics.
"Infrastructure remains a cornerstone of private investment
strategies, offering stability and inflation protection in volatile
markets," said BCG managing director and senior partner Wilhelm
Schmundt, the firm's global lead for infrastructure investment and
a coauthor of the report. "As investors adjust to a maturing
market, we see significant opportunities emerging in energy
transition, digital infrastructure, and new investment structures
designed to attract capital."
Key Findings from the Report
- Fundraising Outlook. Infrastructure funds raised
$87 billion in 2024—a 14%
year-over-year increase from 2023, but still 43% below 2022
levels.
- Deal Volume and Value. Infrastructure transactions
declined by 8% in 2024, following a 19% drop in 2023. However,
large-scale deals in digital infrastructure and energy transition
signal a potential rebound. The average deal size is trending below
the 2023 mark and is 40% below the peak reached in 2021.
- Sector-Specific Trends. Although traditional energy
investments remain essential, renewable energy and battery storage
solutions continue to attract investor interest. AI-driven demand
has made data centers one of the fastest-growing infrastructure
asset classes.
How Funds Are Adapting to the New Environment
Infrastructure investors are refining their strategies to remain
competitive in an evolving market. Key approaches include:
- Industry Consolidation. M&A is becoming a key tool
for general partners. Some are scaling up into "one-stop-shops" for
infrastructure investments across the entire asset class. Others
are pursuing deals to strengthen their niche, geographic, or sector
focus, reinforcing both broad-based and specialist strategies.
- Expanding Investment Mandates. Many funds are broadening
their product options and are offering a range of infrastructure
strategies with different risk/return profiles to their
investors.
- Enhancing Operational Value Creation. Funds are adopting
more active asset management strategies, leveraging technology, and
improving efficiency to maximize returns.
- Exploring New Fund Structures. The rise of continuation
vehicles, co-investments, and sector-specific funds is providing
limited partners with more tailored investment opportunities.
Looking Ahead: Building for the Future
Despite near-term uncertainties, the report anticipates
continued growth in infrastructure investment, particularly in
sectors driven by AI and digital transformation. Governments
worldwide are increasingly looking to private capital to bridge
infrastructure funding gaps, fostering numerous co-investment
opportunities.
"Private investment will be critical to modernizing
infrastructure and meeting the world's growing connectivity and
energy needs," said Alex Wright, BCG
managing director and partner, and a coauthor of the
report. "With capital deployment expected to accelerate in
2025, we anticipate a more dynamic investment landscape,
particularly in AI-driven infrastructure, renewables, and smart
grids."
Download the publication here:
https://www.bcg.com/publications/2025/investors-gain-advantage-asset-class-matures
Media Contact:
Eric
Gregoire
+1 617 850 3783
gregoire.eric@bcg.com
About Boston Consulting Group
Boston Consulting Group
partners with leaders in business and society to tackle their most
important challenges and capture their greatest opportunities. BCG
was the pioneer in business strategy when it was founded in 1963.
Today, we work closely with clients to embrace a transformational
approach aimed at benefiting all stakeholders—empowering
organizations to grow, build sustainable competitive advantage, and
drive positive societal impact.
Our diverse, global teams bring deep industry and functional
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fueled by the goal of helping our clients thrive and enabling them
to make the world a better place.
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SOURCE Boston Consulting Group (BCG)
