As Raj Agrawal notes in his 2026 Infrastructure Outlook, we are operating in a world of more persistent inflation, greater macro and geopolitical volatility, and rapid technological change. In this Regime Change environment, stocks and bonds can come under pressure simultaneously, rendering 60/40 allocations less effective at delivering returns and “shock absorption” amidst volatility. Greater market concentration, combined with higher financing costs, is likely to put pressure on public market returns.
We think the environment we are describing calls for diversification outside of public markets, as well as exposure to durable global investment themes. It also favors strategies that can deliver both portfolio resilience and attractive returns, particularly those aligned with a hard asset, low-obsolescence (“HALO”) framework: businesses with collateral-backed cash flows, providing critical services in a rapidly evolving world, and meaningful upside potential.
We believe private infrastructure can deliver these attributes and warrants increased investor attention. The asset class captures structural growth, capital preservation, and ownership of assets with relatively low risk of obsolescence, even in the face of AI disruption.
Infrastructure as a Foundation for a Multi-Decade Investment Cycle
Amid elevated geopolitical and economic uncertainty, demand for Infrastructure remains notably durable. In our view, the world is entering a prolonged investment cycle driven by digitalization, electrification as well as an increasing need for energy security and supply-chain reconfiguration. Assets tied to power, data, energy, logistics, and connectivity are no longer mere economic enablers, but rather increasingly strategic in nature, shaping competitiveness and resilience at both the corporate and national level. Importantly, many of these assets benefit from relatively low obsolescence risk, as they underpin the essential building blocks of economies.
What Is Driving the Surge in Demand for Infrastructure?
Growth in cloud computing, data consumption, and AI is driving a step change in computing requirements, with global contracted data center capacity projected to increase by more than 200% from 2025 to 2035, according to Data Center Dynamics. At the same time, the International Energy Agency estimates that global electricity demand could rise by at least 40% over the next decade, which would require substantial incremental investment in generation, transmission, distribution, and grid resiliency.
Meeting these demands will require substantial investment: global infrastructure needs are projected to exceed $106 trillion by 2040.1 With public balance sheets constrained by higher debt burdens, aging populations, and rising security commitments, private capital is likely to play a central role in closing this gap. Through all of this, persistent geopolitical and macro volatility are shifting the investment landscape.
Taken together, sustained demand, paired with an aging asset base in need of replacement, underpins what we view as a compelling long-term investment opportunity in Infrastructure.
EXHIBIT 1: Demand for Data and Power Is Durable Across Economic Conditions
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