Infrastructure investment is expected to boom this year, with some private asset mangers forecasting inflows will be up by 50 per cent.
These figures were contained in new research from the Carne Group. Last year infrastructure fundraising dipped to $9.7bn (£7.2bn) bringing the total assets under management to $1.6 trillion worldwide. However there is more optimism for funding levels for 2025, with 84 per cent of managers surveyed by Carne expecting inflows to rise, and 16 per cent anticipating an increase of 50 per cent.
This positive sentiment is underpinned by the demand for new infrastructure associated with AI developments, alongside the ongoing net zero transition.
New funds are also expected to flow into this sector from increased participation in the asset class by retail investors, many of whom are taking advantage of new semi-liquid fund vehicles — such as the UK’s new LTAFs, which have been set up to facilitate greater DC investment into private markets.
This AI revolution is reflected int he fact that the vast majority of managers surveyed now use this technology themselves across their business, which includes investment strategy, risk management, and compliance. Carne Group said only 8 per cent of managers surveyed don’t use AI in thee areas.
In addition, every respondent acknowledged AI as being critical to delivering alpha returns for clients with a quarter of managers (24 per cent) calling it ‘very important’.
Over the next three years, managers said AI would have the biggest positive impact on idea generation and investment decision making, followed by risk management.
Carne Group chief regulatory and client solutions officer Des Fullam says: “Decarbonisation and the rise of AI are driving infrastructure investment. The building of wind and solar farms, data centres for AI, and the grid to power both data centres and electric vehicles all require long-term financing but come with relatively predictable long-term payoffs.
“As government finances come under pressure infrastructure funding gaps in areas such as affordable housing, transport and energy will need to be filled. Even as the ESG landscape evolves, the appetite for long-term returns should trump short-term politics.”
The findings are part of Carne’s four-part private markets report series, which surveyed 100 C-suite executives from global private market fund managers, including 25 infrastructure specialists collectively overseeing $175 billion in assets under management.
The survey also highlighted how technology and outsourcing are central to the evolution of the infrastructure sector, helping managers meet investor and regulatory demands.
It found that 92 per cent of infrastructure managers now use AI to support investment strategy, risk management, and compliance. The same proportion also said they plan to increase outsourcing, with as compliance and reporting requirements the primary driver, followed by difficulty recruiting the right staff.
In addition 72 per cent are predicting growth in retail fundraising, and 96 per cent expect consolidation across the sector in the next five years — with also half predicting a ‘sharp’ rise.
Fullam adds: “Infrastructure managers are under intense pressure to deliver returns while meeting higher governance and reporting standards.
“Outsourcing isn’t just about efficiency, it’s about building the resilience needed to manage complex, capital-intensive projects. The right partners can bring the specialist expertise and technology that free managers to focus on investment opportunities in energy, transport, and digital infrastructure: areas that will define the sector’s growth in the years ahead.”