Infrastructure

Infrastructure: Resilient income and long-term growth as we enter 2026

As we move into 2026, investors face a complex macroeconomic environment. Geopolitical tensions and uncertainty around global trade policy are weighing on sentiment, while rapid advances in artificial intelligence and a remarkably resilient developed world consumer are supporting global growth. This backdrop reinforces the importance of assets that can deliver resilient income, inflation protection and steady growth across market cycles.

Private infrastructure has continued to demonstrate these characteristics. Despite heightened volatility in listed markets, the asset class delivered a 10.5% year-over-year return as of mid-2025, exceeding its long-term average. With fundraising and deal activity recovering and valuation multiples remaining below recent peaks, we believe infrastructure is entering 2026 from a position of strength. Supported by compelling structural trends such as digitalisation and electrification, infrastructure remains well placed to play a stabilising role in diversified wealth portfolios.

Three high-conviction views for 2026:

1. Infrastructure valuations remain attractive relative to listed markets

After peaking in 2022, private infrastructure valuation multiples have reset and are now close to long-term averages. Current entry multiples sit below those of US listed equities and broadly in line with global equity markets. Historically, this valuation relationship has often occurred during periods of heightened market stress, suggesting infrastructure is attractively priced relative to other growth assets.

Infrastructure assets also benefit from long-dated contracts, regulated revenue frameworks and the stability of demand for the essential services they provide, all of which can help cushion returns during periods of economic uncertainty.

What does this mean for investors?

For portfolios seeking to balance growth with capital preservation, infrastructure offers an appealing entry point. Current valuations provide scope for attractive long-term returns without relying on elevated market optimism.
 

2. Long-term returns will be driven by earnings growth and income

While valuation multiples may provide some short-term support, we believe earnings growth will be the dominant driver of infrastructure returns over the medium to long term. Structural tailwinds (including rising electricity demand, increased data consumption and investment in essential networks) underpin predictable cash-flow growth across many infrastructure assets.

Our long-term modelling suggests private infrastructure could deliver annualised returns of around 9–10% over the next decade, with outcomes remaining resilient across a range of macroeconomic scenarios. This return profile is supported by stable income generation and operational improvements rather than reliance on multiple expansion.

What does this mean for investors?

Infrastructure can support long-term wealth objectives by providing a reliable income stream alongside capital growth, making it attractive for investors focused on compounding returns and portfolio stability.
 

3. Structural trends continue to shape the opportunity set

Infrastructure opportunities are increasingly defined by long-term structural changes rather than short-term economic cycles. Digitalisation is driving demand for data centres, fibre networks and communications infrastructure, particularly as AI adoption accelerates. Supply constraints in established markets are supporting pricing power and encouraging development in new regions.

Electrification is also driving sustained investment across renewable energy generation, battery storage and regulated power networks. Global power demand is expected to continue rising, reinforcing the need for reliable, lower-cost energy solutions. Within transport, airports are benefiting from recovering passenger volumes, while trade-exposed assets such as ports face greater uncertainty due to shifting tariff regimes.

What does this mean for investors?

Infrastructure assets aligned with durable structural growth trends can enhance portfolio resilience and provide robust long-term growth. Careful asset selection remains essential, particularly in sectors exposed to trade or policy volatility.
 

Investment implications and strategic considerations

Portfolio positioning

We believe infrastructure deserves consideration as a core allocation within diversified wealth portfolios. Its combination of income generation, long-term growth potential, strong risk-adjusted returns and diversification benefits can help smooth portfolio outcomes across market cycles. Infrastructure’s relatively low correlation to traditional equities and bonds enhances its value during periods of market uncertainty.

Key opportunities

• Digital infrastructure: Data centres and fibre networks are benefiting from accelerating demand linked to cloud computing and AI workloads.
• Energy transition assets: Solar, wind and battery storage continue to gain share as costs decline and power demand rises.
• Regulated utilities: Increased investment in electricity transmission and distribution supports predictable earnings growth under regulated frameworks.

Risks and areas to monitor

Trade-sensitive infrastructure assets face risks from slowing global trade growth and policy uncertainty. Large-scale developments require disciplined execution to manage costs and timelines, while regulatory risk remains an ongoing consideration despite broadly supportive settings.

The role of active management

Infrastructure is a diverse asset class with wide variation in asset quality, regulatory structures and operational complexity. Active management and rigorous due diligence are critical to identifying assets with strong fundamentals and avoiding asymmetric risks.
 

Conclusion

Looking ahead to 2026, infrastructure’s blend of resilient income, structural growth drivers and cyclical resilience positions it well for investors navigating an uncertain macro environment. While risks remain, assets aligned with digitalisation, electrification and essential services continue to benefit from powerful long-term tailwinds.

For investors focused on building durable, outcome-oriented portfolios, infrastructure can play an important role, particularly when accessed through a selective, actively managed approach.