2023 was an interesting year for private infrastructure. As in other private markets strategies, transactions became more difficult to complete as rising interest rates caused traditional credit markets to freeze and exacerbated a valuation gap between buyers and sellers. On the other hand, the volatile market environment reinforced the value of infrastructure as a potential hedge against both inflation and macroeconomic stress.

First, the challenges. Infrastructure, like all asset classes, felt the effects of a capital crunch in 2023. Higher interest rates have created tighter credit conditions around the world, but particularly in Europe and the United States. Syndicated markets and IPO markets were largely shut during the year, and banks in many countries were forced to curtail lending as rising interest rates put