Despite concerns in 2023, DWS does not expect the unlisted infrastructure market to see a major repricing, due to strong cash generation and expectations that interest rates will start to fall.
This is the view shared in DWS’ latest bi-annual alternatives investor letter by Paul Kelly, global head of alternatives, who believes 2024 will see a return to stronger fundraising and transaction activity.
“Concerns over a repricing event in infrastructure were top of mind during 2023, particularly given the dramatic movements seen in real estate markets; however, the infrastructure market has not seen a similar market-wide downward correction and infrastructure has absorbed higher rates well in comparison to other asset classes,” he noted.
Kelly points out in the recent years of volatile macroeconomic conditions, there has continued to be an investment-performance benefit for assets that have contracted revenue streams, as they typically enjoy attributes such as
