As the world grapples with the economic and social fallout of COVID-19, infrastructure investors are rightly examining their portfolios for red flags. For some assets the impacts are clear, and troubling. According to the International Air Transport Association (IATA), global air traffic is down 70 percent year on year. Volumes through container terminals in major global ports are off at least 20 percent, and traffic on some of the major U.S. highways is down by more than 50 percent. Investors in airports, ports and toll roads, where revenues are primarily driven by the movement of goods and people, can expect to see significant deterioration in profitability. Moreover, many of these assets traded at high multiples during the past five years on the basis of stable growing traffic projections. Further valuation impairments can be expected as the full impact of this crisis unfolds over the coming months.

The energy sector too has felt its fair share of pain. Major oil producing