Three reasons to invest in Infrastructure Debt today

We believe infrastructure debt offers distinct advantages in today’s market, combining resilience, structural diversification, and alignment with global megatrends. Unlike more cyclical areas of private credit, it is also backed by essential assets and supported by generally stable, often contracted cash flows. The points below highlight why we believe infrastructure debt is a compelling opportunity for long-term investors.

1. Resilience

Historically, infrastructure debt has offered resilience through economic cycles, as it is generally backed by essential assets with stable, inelastic demand for their services. We believe these assets will generate consistent cash flows and can pass through inflationary costs—contributing to default rates that are potentially lower than corporate credit.

This is a line chart depicting that credit default rates often rise during periods of market stress, but infrastructure debt has historically offered relative stability through such environments. This line chart is set up over a trailing 12-mont default rates with a line for all infrastructure debt and another for nonfinancial corporates.

2. Diversified investment opportunity

In recent years, between 60–90% of direct lending deals have been tied to M&A activity, making supply vulnerable when deal flow slows—resulting in dry powder buildup, tighter pricing, and weaker credit standards.

In contrast, infrastructure debt generally supports a wider range of financing needs— such as project finance and capital expenditure programs. It also requires complex underwriting, which creates a more specialized and less efficient market. We believe this dynamic presents more consistent opportunities to capture risk adjusted relative value.

This is a pie chart showing the percentages of infrastructure debt use of proceeds from June 2020 to June 2025. The partitions include greenfield, refinancing, M&A and take private and additional financing.

3. Secular tailwinds driving demand

The energy transition, digitalization, growth of AI, and drive for energy independence are reshaping the global infrastructure landscape. Given the significant capex needs, there is an accelerating demand for private capital to fund these growing trends. We expect these trends to present lending opportunities in infrastructure over the long-term.

This is a bar chart showing the global infrastructure debt transactions by sector in USD millions. Each bar is represented by renewables, energy and power, transportation, digital, social and other. This is from 2020 to the first half 2025.

Infrastructure: Stable, scalable and in demand

If allocating to private infrastructure stands to offer both ballast and buoyancy, then what’s behind this? In this article, IFM’s Andrea Mody looks at the global megatrends that are creating powerful tailwinds for the asset class, and driving interest in infrastructure among long-term investors.