With infrastructure funding needs rising globally, and most governments facing budget pressures, the private sector increasingly plays a critical role in closing the funding gap, and infrastructure debt represents an important part of this needed capital. Infrastructure debt has traditionally been a space occupied by banks, but in recent years it has gained popularity among investors, with the infrastructure fixed-income and private-loan markets becoming more prominent, and representing a valuable source of duration for long-term investors.

While investors have allocated to infrastructure debt for decades using various types of fixed-income offerings, the opportunity to commit capital to commingled funds focused on infrastructure debt is relatively new (see “Infrastructure debt overview,” on page 18). New regulation targeting banks and investment houses has opened a window for infrastructure debt funds to fill a gap where banks once operated more prominently.

Defin