Slow and steady increases in interest rates have many investors concerned about the impacts rising rates can have on current and future infrastructure assets. If the cost of capital and rates continue to head north, will asset valuations head south? How resilient will revenues and cash flows be?

Whatever happens next in this volatile and unpredictable time, investors should be prepared for either additional gradual increases or a longer pause, depending on economic conditions.

What are the impacts of rising interest rates and inflation on infrastructure assets? “In our view, private infrastructure is a resilient asset class and well-placed to withstand moderate rises in interest rates and inflation, particularly if they are driven by improved economic conditions, as has been the case in the U.S. for the last two years,” says Vittorio Lacagnina, a senior vice president, private infrastructure Americas for Partners Group in New York. That said, it can get problematic