Q&A: Why Scale Matters for Private Investors
The infrastructure supercycle is accelerating. With significant opportunities in energy, transport and connectivity, scale matters more than ever—driving both transformative impact and long-term value.
In a conversation spanning sourcing, value creation and exits, Sam Pollock, CEO of Brookfield Infrastructure, explains why scale is a critical advantage. We also explore some case studies that bring those advantages to life.
Q: Given the long-term capital needs of infrastructure assets, what advantages best position an investor to unlock value and drive durable outcomes?
Pollock: Infrastructure businesses are large and capital-intensive, and many sellers of assets come to market because they can’t meet the next wave of capital requirements. We’ve found that the ability to deploy capital at scale can be highly attractive to sellers—in fact, we’ve found that it can be the biggest differentiator at the negotiation table.
Having a global footprint and local presence also offers flexibility to invest where opportunities are most attractive. Teams on the ground are able to identify value that others often miss when employing a “fly-in, fly-out” approach.
Finally, an operations-oriented management style can create value by driving business plans, improving margins, strengthening balance sheets and de-risking businesses. Ultimately, this enables long-term success and an effective exit strategy that returns capital to investors.
Q: With significant capital flowing into infrastructure, how do you maintain discipline and avoid overpaying?
Pollock: From our perspective, discipline comes from choice. Having a broad origination platform and strong industry relationships—enabling corporate partnerships, carveouts, take‑privates and platform builds—can provide the flexibility to pass on deals that don’t align with a value-investing framework or that have unattractive terms.
In practical terms, speed and certainty often matter more to the seller than price, providing attractive opportunities to buy for value. When the sale process for a high-quality strategic asset is more competitive, you can pay a fair price for the asset and then earn the lion’s share of the returns through operational improvement and growth strategies.
Infrastructure assets often have high margins of over 50%, which limits cost-cutting opportunities. Instead, value creation can come from optimizing business plans and investing capital to grow revenues. An owner can enhance the contract profile, making businesses more valuable and better able to secure attractive financing—with the added benefit of de-risking the business for the next buyer.
"It may seem counterintuitive, but I’d say that scale increases nimbleness."
Q: Critics say large funds are less nimble. What do you say?
Pollock: It may seem counterintuitive, but I’d say that scale increases nimbleness. Larger firms usually work on several active opportunities across regions and sectors simultaneously. If any single opportunity becomes less attractive, they can simply move on to more attractive ones.
Scale also allows for seamless reassignment of talent. Investment teams can shift across continents to pursue opportunities, then later pivot toward other regions. When there is a significant market disruption—such as an economic or geopolitical event —scale can allow you to allocate specialized resources into an opportunity within days.
Q: How can scale help to build platforms?
Pollock: There’s a variety of ways to build platform value, but we believe the best opportunities can be taken advantage of by investors with scale. Identifying tuck-in acquisitions requires a broad origination business; investing in organic growth projects requires capital; assembling and deploying strong management teams means having access to a large pool of talent; and actively managing balance sheets and capital resources is more achievable for better-resourced investors. As a large-scale investor, we also benefit from strategic partnerships that we can leverage to help ensure a new platform’s success. Our work with Enwave shows the benefits of this approach.
Case Study: Building the Largest District Energy Platform in North America
In 2012, Brookfield Infrastructure acquired Enwave, a district energy system that provided heating and cooling services to customers such as hospitals, data centers, apartments, retail spaces and office buildings in two Canadian cities, Toronto and Windsor. Over the next eight years, Brookfield grew Enwave into the largest district energy system in North America, delivering power across 13 cities through a unified and professionally managed platform.
The transformation of the business involved several significant improvements. We handpicked new leadership to shift the company culture from passively responding to growth opportunities to actively pursuing sales. Then, as we continued to expand existing networks, we enhanced efficiency through centralized finance and procurement. Strong balance sheet management secured long-term, investment-grade financing, which supported growth and enhanced stability. Enwave’s EBITDA rose 20% annually, its business was de-risked and it became an attractive, stabilized platform investment. When it was time to exit, Enwave attracted large institutional investors interested in securing long-term cash flows.
In 2021, Brookfield sold Enwave in two parts—Canadian and U.S. operations—for $3 billion in aggregate.
Q: Doesn’t scale make exiting harder?
Pollock: That is a common perception, but we’ve found that scale can actually broaden the exit strategy toolkit. The key is creating optionality from the start by separating business lines, installing focused and accountable leadership and optimizing capital structures to return capital sooner. This can create several viable exit paths.
One option is an “en bloc” sale, where an entire portfolio of assets is sold to a single buyer. This allows sellers to recycle capital efficiently and buyers to gain immediate scale and diversification.
A carveout is another option, where managers can sell down by line of business or geography to attract focused local buyers that may not be interested in a larger platform. For example, we transformed a combined tower and fiber business into two distinct platforms by carving out the fiber-to-the-home arm. Selling the fiber business in the middle market left a pure-play tower company, which is more appealing to strategic and financial buyers. This separation not only broadened the buyer universe but also lowered the equity requirement, making the asset more attractive and demonstrating how breaking up businesses can overcome scale challenges.
Minority stake placements can also provide a path to exit. An increasing number of core and direct investors are seeking long‑duration, inflation‑linked cash flows but are unable or unwilling to take operational control. Selling 25–40% stakes can set valuation, provide liquidity, expand the buyer base and result in the best price—and allow the seller to retain control for a period of time to finish the business plan before ultimately exiting fully.
Finally, on a selective basis, managers can turn to the public markets. For a public listing to work, the business must be easy to understand, be a pure play and be comparable with publicly traded peers.
Q: How does scale help the ability to secure corporate partnerships?
Pollock: Much of the world’s infrastructure sits on corporate balance sheets—utilities, telecommunications companies, energy companies and industrials. Many of these companies are realizing that they don’t need to own the underlying fiber, towers, pipelines or onsite energy. They need assured access under long‑term agreements so they can focus their capital and management bandwidth on the core business.
We have found that corporates are increasingly seeking to partner with firms that have a demonstrated track record of operating mission-critical systems, a willingness to fund multiyear growth programs and the flexibility to structure solutions that free up capital for other purposes while ensuring reliability.
Case Study: Partnering With a Telecom Powerhouse
Deutsche Telekom’s tower network in Germany and Austria is among Europe’s most critical telecom assets. The company long debated bringing in a partner, recognizing that the towers were essential but capital-intensive to maintain and expand. The 5G buildout in particular required significant investment that competed with other priorities on the corporate balance sheet.
In 2023, Brookfield was selected as a partner because of its proven track record operating telecom tower assets in markets such as the U.K., France, the Nordics and India, coupled with the scale and access to capital to fund future growth. The transaction included a multi-decade long-term master service agreement, ensuring Deutsche Telekom retained access while unlocking capital for other purposes.
This deal demonstrates how scale, operational credibility and structuring flexibility can attract some of the biggest and most essential companies powering today’s economy.
Q: High-quality essential assets often have higher barriers to entry. Does scale play a role in that?
Pollock: Scale is a barrier to entry. Infrastructure assets are attractive in part because they are difficult to replicate. Building these assets is extremely capital-intensive, and because they provide essential services, they often benefit from strong contractual or regulatory frameworks.
Our acquisition of Colonial Enterprises is a good example of that. Over its 60-year history, Colonial built thousands of miles of pipeline and developed deep, longstanding relationships with its customers. The scale and time required to build a similar network are so great that it’s nearly impossible for anyone to compete. Only an investor operating at scale could have the resources to acquire such attractive infrastructure assets providing critical services built over many decades.
Case Study: Securing One of America’s Most Critical Energy Arteries
In April 2025, Brookfield announced an agreement to acquire Colonial Enterprises, owner of the Colonial Pipeline. As the largest refined petroleum products system in the U.S.—spanning 5,500 miles from Texas to New York—Colonial has long served as a backbone of energy distribution on the East Coast.
With proven resilience and strong customer demand, the asset offered Brookfield an opportunity to secure scale in a critical sector. And scale capital enabled the acquisition, giving us the confidence to pursue a $9 billion transaction and secure one of America’s most critical energy networks.
Q: What should investors take away about why scale matters in infrastructure?
Pollock: Scale is not about being big for its own sake. It’s about converting capital, talent and global reach into certainty and speed, and ultimately driving value for investors. It earns managers a seat at the table to acquire large-scale, critical infrastructure—and provides the tools to create value throughout active ownership. Scale also enables access to assets that serve national priorities, including energy security and resilience, areas where private capital plays a vital role alongside government policy.
With the right partner—one that combines global scale, local presence and an owner-operator mindset—investors can capture the benefits of scale and position portfolios for long-term outperformance.
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This commentary and the information contained herein are for educational and informational purposes only and do not constitute, and should not be construed as, an offer to sell, or a solicitation of an offer to buy, any securities, related financial instruments or investment advisory services. This commentary discusses broad market, industry or sector trends, or other general economic or market conditions. It is not intended to provide an overview of the terms applicable to any products sponsored by Brookfield Asset Management Ltd. and its affiliates (together, "Brookfield").
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