Private infrastructure had a challenging 2023. Although performance remained relatively stable, fundraising is at the weakest level in 10 years, while deal volumes have fallen 40 percent year-on-year due to wide bid-ask spreads. High interest rates, a mixed economic outlook and geopolitical tensions continue to weigh on the industry. In our infrastructure outlook last year, we were relatively cautious about the asset class due to uncertainties in the macro environment. But with 2023 behind us, we now wonder whether markets have actually become too bearish.
Infra-skeptics often express disbelief around infrastructure’s current valuations and performance and suggest that it is best to remain on the sidelines before the eventual correction. Other skeptics also point to sector-specific issues, including concerns about the notable secular tailwinds that we previously highlighted. For example, on deglobalization, they question whether onshoring is actually real, since global trad