Senior and mezzanine infrastructure debt have experienced significant growth over the past decade, and they now form an important part of institutional investors’ portfolios. The European market makes up around 90 percent of the senior funds raised over the past five years, whereas North American–focus funds dominate the mezzanine market. Prior to the global financial crisis (GFC), infrastructure financing was predominately provided by banks. Infrastructure debt as an institutional asset class emerged to fill the gap left by banks that were hit with higher capital charges, making it difficult for them to make long-term loans.

The attractiveness of the infrastructure debt asset class has been further boosted by both the ever-declining fixed-income yields and the change to the Solvency II regulation in 2016 to reduce capital charges for European insurance companies and regulated pension funds for investing into the sector. This change was introduced to reflect infrastructur