Despite market turmoil in 2022, the outlook for the infrastructure sector remains strong, with secular trends such as digitalization and decarbonization driving the need for new investments, and previously underperforming industries, such as toll roads and airports, finally recovering.
According to UBS’ 2023 Infrastructure Outlook, private infrastructure has earned a reputation of its resilience in inflationary environments and its defensive nature. This makes it relatively attractive compared to other asset classes during uncertain times, especially when investors are looking for safe havens. In addition, private infrastructure saw record fundraising, strong performance and steady valuations in 2022. Macro conditions have worsened, however, with inflation, rising interest rates, geopolitical tension, political uncertainty and extreme weather putting pressure on the asset class. As a result, investors can no longer count on cheap credit to boost investment returns.
