Strategy and value creation in a changing infrastructure environment

We started as a global, diversified core-focused business. As the industry has matured, the best investors have become increasingly specialized, and we have followed suit. We’ve been focusing on building specific capabilities in infrastructure sectors we think are the most attractive, and in the past five years, that has been in the digital and energy transition in the two largest markets — North America and Europe.

Our business remains committed to the small- and medium-sized enterprise part of the market, where we believe competition is lower, valuations are more reasonable and returns are attractive.

Our focus on control investments has increased, avoiding consortium deals where decision making can be difficult in an increasingly complex environment. In tandem, we have evolved our teams’ capabilities and processes to enable us to execute more complex value-creation plans, while always mak¬ing sure our infrastructure portfolio companies deliver stable and predictable cash flows as they mature.

Finally, we have the research capability to support the business and help us have a stronger understanding of the underlying fundamentals of our focus sectors, supporting strategy and underwriting calibration.

This evolution of our business and capabilities has allowed us to carve out a relevant niche and has translated into better investment success.

As large investors’ allocations to infrastructure have matured, they are thinking about how to complement their existing portfolio construction decisions. Typically, this is more control over where capital is deployed, be that markets, sectors or even individual asset selection, and the asset-risk profile.

For example, there has been a proliferation of single-asset continuation funds, where seed assets give investors the chance to appraise the assets in which they will invest.
We’ve sought to work with large investors, providing them a more tailored approach through customized mandates where they can design and implement a bespoke investment strategy. It’s a different style of relationship and requires upfront effort and a clear joint understanding to manage successfully over time.