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We need to talk about infrastructure
Throughout history economic and societal growth has been powered by infrastructure, from the industrial revolution to today's digital evolution.
Infrastructure spans all facets of modern-day life, from utilities that power our societies and supply water to our communities; airports, rail networks, ports and highways that connect people and businesses; telecom and digital infrastructure that underpin our modern economy.
Infrastructure is the backbone of our societies
Physical systems enabling energy, transport, water and digital connectivity
Unnoticed in operation, critical in failure
Infrastructure today
Source: The infrastructure moment, September 2025 | McKinsey & Company
It's estimated that US$106 trillion in investment will be required by 2040 for new and updated infrastructure.
Source: The infrastructure moment, September 2025 | McKinsey & Company
How the projected US$106 trillion infrastructure investment is allocated by sector
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US$36 trillionTransportation
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US$23 trillionEnergy
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US$19 trillionDigital
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US$16 trillionSocial
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US$6 trillionWaste and water
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US$5 trillionAgriculture
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US$2 trillionAerospace and defence
Infrastructure is under pressure
Ageing infrastructure systems continue to buckle under the strain of prolonged use.
New technologies are turbocharging rising power demands. Changing geopolitics have underlined the vulnerability of critical infrastructure and the need for resilient infrastructure networks.
- Geopolitics
- Strain on energy, water and transport systems
- Ageing infrastructure
System pressures
Recent headlines suggest an acceleration in infrastructure investment is needed
- Power demand growth
- Global transition to cleaner energy
- Urbanisation and changing demographics
Real-world events
Power outages and blackouts
Large-scale grid failures and power supply disruption have become more commonplace in recent years. Power demand continues to grow while grid and electricity networks around the world struggle with the strain.
Source: Electricity 2026 | IEA, 2026
Over 2,500 GW
of infrastructure projects are waiting to be connected to the grid.
Real-world events
Water shortages
Drought impacts are becoming steadily more human-made and extremely costly. These droughts are caused by overuse and degradation rather than natural weather patterns alone.
US$307 billion
per year, cost of human-caused droughts
50% of the global urban population
could face water scarcity by 2050
Electricity infrastructure
Essential public systems
Water and utility networks
Renewable energy infrastructure
Electrification systems
Cleaner power networks
Natural gas pipelines
Supporting energy infrastructure
Flexible power systems
Telecom towers
Connectivity infrastructure
Telecom networks
Themes reshaping the world
These system pressures can no longer be ignored. Governments and investors are starting to act, with policy and fiscal packages being announced across developed economies.
Sources: The infrastructure moment, September 2025 | McKinsey & Company | US Treasury FY 2025
Meeting the world's infrastructure needs requires investment equivalent to the entire US federal budget every year for the next 15 years
Infrastructure trends in action
Modernising infrastructure
Modernising infrastructure
Infrastructure networks are being upgraded to improve resilience, efficiency and reliability as power demand increases.
Source: Failure to Act: Economic Impacts of Status Quo Investment Across Infrastructure Systems, 2021 |The American Society of Civil Engineers (ASCE)
- Electricity infrastructure
- Essential public systems
- Water and utility networks
Decarbonisation
Decarbonisation
Infrastructure investment is supporting the transition towards cleaner and more sustainable energy systems.
Source: Energy Transition Investment Trends, 2026 | BloombergNEF
- Renewable energy infrastructure
- Cleaner power networks
- Electrification systems
Resilience and reshoring
Resilience and reshoring
Energy systems are adapting to support changing power demand and improve energy security.
Source: Statistical Review of World Energy 2025 | Energy Institute
- Flexible power systems
- Natural gas pipelines
- Supporting energy infrastructure
Data infrastructure
Data infrastructure
Expansion of digital infrastructure supporting growing connectivity.
Source: The cost of compute: A $7 trillion race to scale data centers, April 2025 | McKinsey & Company
- Telecom networks
- Connectivity infrastructure
- Telecom towers
Explore all four trends
Select a trend to explore
- 01 Modernising infrastructure
- 02 Decarbonisation
- 03 Resilience and reshoring
- 04 Data infrastructure
What makes this a compelling investment opportunity
Infrastructure businesses sit at the centre of long-term structural themes including power demand growth, urbanisation, AI and digital infrastructure, and decarbonisation.
Why invest and why it matters
Accessing the infrastructure opportunity through long-lived physical assets that we believe have a sustainable competitive advantage, supported by resilient business models and long-term demand.
Key characteristics
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01 Protected by regulation
Certain infrastructure assets that produce attractive returns that are set and protected by regulation or long-term contracts.
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02 Stable long-term contracts
Infrastructure assets often operate with predictable and recurring revenue streams supported by long-duration contracts.
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03 Sustainable competitive advantage
Companies with enduring physical assets that possess a sustainable competitive advantage.
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Electricity, gas and water networks
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Renewable power generation
Source: Investor Relations Sabesp 2026
Company example
Companhia de Saneamento Basico do Estado de Sao Paulo (Sabesp) is the largest water and waste management company in Latin America. It serves nearly 30 million people with water and over 27 million with sewage collection.
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Gas pipelines
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Railroads, airports and highways
Source: The VINCI group - VINCI 2026.
Company example
VINCI is a world leader in concessions, energy and construction in more than 120 countries. It operates toll roads, airports, and rail infrastructure, including one of France's largest motorway networks and more than 70 airports worldwide.
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Telecom
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Data infrastructure
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Specialised real estate
Company example
Singapore Telecom is a telecommunications conglomerate, the country's principal fixed-line operator and one of the four major mobile network operators operating in the country. It owns a portfolio of telecom assets in Singapore and Australia, and a stake in Asia's biggest datacentre owner.
Why now
The growth opportunity within infrastructure is significant and, in our view, underappreciated.
Investing in infrastructure is...
Consistent
Cash-flows can be highly predictable with consistent revenue streams, providing a source of income to the fund.
Future-Facing
Exposure to long-term growth themes including power demand, electrification and digital infrastructure demand.
Stable
Inflation-linked growth potential with attractive upside/downside characteristics and drawdown mitigation potential.
Tom Levering
Equity Portfolio Manager
The current environment for infrastructure is the best I have seen in my near 30 years of investing, given growth expectations are at their highest and valuations aren't reflecting that growth.