In the infrastructure space, a convergence of trends—some that investors have been focused on for years, others more recent—should continue to drive investment opportunities in high-quality assets.
Recent developments include a massive data investment opportunity, the global push toward decarbonization, and the midstream sector falling out of favor due to ESG concerns. These are playing out amid longer-term trends such as aging utilities that require significant capital upgrades, and governments worldwide seeking solutions to their ballooning debt.
At Brookfield, we focus on infrastructure assets that provide the backbone for essential services supporting vital economic and social activity. Prominent examples include electricity transmission and distribution; water distribution; midstream systems; ports, rail and roads; and communications and data networks.
Given their essential nature, these assets often provide investors with stable and secure cash flows, downside protection, diversification from other asset classes, inflation protection and long-term liability matching. By focusing on essential operating assets, an infrastructure strategy should be resilient in most economic environments. While we believe that infrastructure is compelling for investors across a variety of market conditions, today's climate appears to be particularly rife with opportunity.