Megafunds have plenty of muscle when it comes to raising capital. But middle-market players have emerged as a leader when it comes to dealmaking.

The vast majority of transactions in the infrastructure arena are taking place in the middle and lower end of the market, and that opportunity set is attracting attention from both investors and large funds that are introducing their own middle-market strategies. According to Hamilton Lane, 96 percent of transactions completed in 2022 involved assets with enterprise values below $2.5 billion, and 78 percent of transactions featured assets with enterprise values under $500 million.

“We’re seeing a pipeline of opportunities in the middle market that is as good as we’ve seen in 20 years,” says Stephen Simpson, a partner at Instar Asset Management. “We believe there is a real need for infrastructure investment in the middle market to help small and medium-sized businesses delivering essential solutions and services to g