The COVID-19 pandemic is unprecedented in terms of events and impact on underlying asset classes. In the infrastructure space, most subsectors have held up relatively well, with only temporary demand depression, given their essential service nature (e.g., utilities). In general, we expect activity levels to remain subdued in the near term and begin to quickly revert to more normalized levels over the medium term. Some specific subsectors (e.g., transport, airports) have had larger impacts, and the reversion to more normalized levels of activity will depend heavily on the efficacy of vaccines and their rollout.
As investors’ appetites for infrastructure continue to increase, the supply of investable assets has not kept pace, leading to a rise in pricing pressure. The amount of uninvested capital waiting to be deployed by infrastructure managers remains at record levels. Moreover, this uninvested capital continues to be more concentrated in fewer investment managers as mega-s