Infrastructure and the Road to Sustainability

As the world begins to see light at the end of the Covid-19 tunnel, demand for greener economies, smart renewable energy sources and greater corporate social responsibility is growing stronger. How is the infrastructure sector responding, and are we seeing new types of investors and strategies? We talk to five infrastructure specialists from across the value chain to examine how the landscape is evolving and the rise of dedicated renewables vehicles. A round-table discussion led by Patrick McCullagh, Managing Director of Sales for Europe and the United States at Alter Domus, finds that amid a diversity of opinions, everyone is pointed in the same direction.

In recent years we have increasingly seen references to ‘old infra,’ utilities, toll roads, ports, airports, and ‘new infra’ such as renewable energy, data/fibre networks and electric vehicle charging infrastructure. But according to Ian Berry, Managing Partner at River & Mercantile, the definition of infrastructure is different for almost everyone. While some see infrastructure as involving ‘lots of steel and concrete,’ Berry sees it differently: “A useful definition is much more about ownership, the rights to operate something that is essential, or a social good.” He notes, “When I first started looking at investing in renewable energy more than 15 years ago, it was considered niche. Today it is widely regarded as not only essential core infrastructure but an environmentally and socially responsible choice.”

Renewables have effectively developed into a sub-asset class within the broader infrastructure and green energy funds sector, says Ajay Pathak, Partner at law firm Goodwin Procter. “Increasingly managers are raising dedicated renewables-only funds.” With larger
asset managers in particular seeing strong investor appetite for dedicated sectors and sub-sectors, the renewables trend is set to continue apace. But investors are not turning their back on traditional infrastructure – each can meet different kinds of needs.

This article was originally published in Sensus Magazine. Download the PDF of this full article by clicking the image below.