Infrastructure Outlook 2024: Embracing the Infrastructure Evolution

As interest in infrastructure ramps up globally, the 2024 Infrastructure Outlook report offers insights into the asset class’s rise to the mainstream. Against the backdrop of economic uncertainties, the report underscores the continued resilience of infrastructure returns, reaffirming infrastructure's status as a portfolio cornerstone.

We take a deep dive into the US Inflation Reduction Act and how the US policy presents long-term opportunities for pension funds. The report also examines how infrastructure debt can help promote climate technologies, why IFM is backing sustainable fuels and electric charging to drive emissions out of transport infrastructure and how investments in customer experience can drive efficiency, safety and value for our clients.

The report focuses on six major themes that we believe are shaping the infrastructure market, including:  

• Infrastructure’s move to the mainstream: With its established track record, resilience to economic challenges over varied market cycles, and low correlation to other asset classes, infrastructure has emerged as a standalone asset class.

• Historically resilient returns continue across economic cycles: Over the past two years, infrastructure returns have continued to demonstrate resilience, with unlisted infrastructure outperforming other asset classes.

• US policy opening doors for pension capital investment opportunities in climate projects: The Inflation Reduction Act presents opportunities for a range of green projects through tax credit transferability, benefits for startups and long-term investment opportunities for pension funds, with other countries and regions following suit.

• Growth credit financing helping to promote climate technologies: Scaling up proven climate-related technologies is essential for a low-carbon future. With equity financing facing economic headwinds, there is an opportunity for debt capital to provide a non-dilutive and attractive funding alternative. 

• Decarbonising and climate-proofing assets to create returns for investors: Asset managers are backing sustainable fuels and electric charging to drive emissions out of transport infrastructure. Capital spending on decarbonising infrastructure should also be complemented with an equally crucial investment in future-proofing assets against the potential impacts of climate change.

• Investments in customer experience to drive efficiency, safety and throughput: With investment horizons spanning decades, infrastructure asset managers are leveraging data and new technologies to drive value for customers and investors now and over the long term.