Pension fund-owned IFM Investors has laid out four key areas for infrastructure investors to watch, including opportunities in renewables and digital infrastructure, and closer partnerships on the horizon with governments.
The report, Resilience and Transition: Infrastructure Outlook, highlighted the macro-themes and disruptions that were shaping the infrastructure sector and creating investment opportunities.
IFM global head of infrastructure, Kyle Mangini, said: “As major investors of pension capital, we see a number of emerging investment opportunities that can generate positive returns while contributing to the resilience of infrastructure assets that working people rely on every day.
“We also believe that long-term pension capital is ideally placed to partner with governments in investing in new and transformational infrastructure projects, helping create jobs and drive economic growth.”
The four key areas outlined in the report for infrastructure investors to watch included:
Decarbonising existing portfolios – Emissions targets set by global governments and businesses are intensifying pressure on infrastructure investors to decarbonise their portfolios but are also creating opportunities for new investment into renewables, electrification and low-carbon fuels that supports the energy transition.
Alternative energy sources – With many of the world’s largest airlines announcing commitments to increase their take up of sustainable aviation fuels, long-term success requires a step change in the level of collaboration between airlines, airports, government and fuel producers.
Digitalisation – The global pandemic has resulted in digital infrastructure (such as telecommunication towers, data centres and fibre networks) facing greater demand than ever before, creating certain investment opportunities in these asset types that demonstrate core infrastructure characteristics.
Public-private partnerships – From US President Biden’s Infrastructure Investment and Jobs Act to the European Green Deal, governments globally have announced significant infrastructure packages to support COVID-19 recovery efforts and emission reduction plans. With trillions of dollars slated for infrastructure development, IFM sees an opportunity and need for governments to partner with long-term equity providers, like pension capital, to start delivering these significant agendas.
