Introduction
Introduction
The infrastructure investment landscape is undergoing a profound transformation as private equity (PE) firms, including industry leaders, shift their focus toward non-core and core plus infrastructure assets. While traditional core assets like airports and bridges offer stability, the saturation of these markets has driven PE firms to seek higher returns through riskier but promising sectors such as energy as a service (EaaS), electric vehicle (EV) supply chains, data centres, semiconductors, and healthcare real estate, particularly in the Asia-Pacific (APAC) region. This insight paper explores the strategic pivot toward these dynamic asset classes, analyzing the drivers behind this shift, including environmental goals, technological advancements, and evolving market demands. It provides a comprehensive look at how PE firms are navigating this new terrain to achieve greater profits, portfolio diversification, and positive social impact.
Key Takeaways
Shift to Non-Core and Core Plus Assets: PE firms are increasingly investing in non-core (e.g., EaaS, EV supply chains, semiconductors) and core plus (e.g., hospitals, warehouses) assets for higher returns and diversification, as traditional core infrastructure becomes saturated.
Renewable Energy Surge: From 2022–2024, nearly one-third of investments targeted EVs and EaaS, driven by net-zero goals, and growth in related sectors like battery storage and HVAC systems
Digital Infrastructure Boom: Data centre investments soared in 2024, fueled by AI and cloud computing demand, with mega deals like Blackstone’s USD16bn AirTrunk acquisition highlighting the sector’s appeal.
Semiconductors Gain Traction: Once overlooked, semiconductors are now attractive due to supply chain shortages, US CHIPS Act subsidies, and stable demand from automotive and IoT sectors.
APAC Healthcare Growth: PE funds are targeting APAC healthcare assets, driven by a projected near-doubling of the region’s over-60 population to 1.2bn by 2050, boosting demand for hospitals and senior care facilities.
Equipment as a Service (EaaS): The shift from capex to opex has spurred investment in equipment rental markets, with a projected 50% CAGR for EaaS from 2024–2030 in developed regions
Real Estate Convergence: PE firms are blending infrastructure and real estate strategies, investing in commercial properties to capitalize on infrastructure’s lucrative returns
Conclusion
The shift toward non-core and core plus infrastructure investments reflects PE firms’ strategic response to a rapidly evolving global market. As demand for sustainable, digital, and innovative infrastructure grows, sectors like renewable energy, data centres, semiconductors, and APAC healthcare are becoming focal points for investment. These assets offer compelling opportunities for higher returns, portfolio resilience, and alignment with global trends like decarbonization and digitalization. This insight paper provides a detailed analysis of these trends, offering valuable guidance for investors navigating the future of infrastructure investing. Discover how PE firms are redefining the infrastructure landscape and positioning for long-term success.
About the Author
Aditi has over 9 years of experience in Financial research. At Acuity Knowledge Partners, she supports private markets team with research requirements at various stages of deal. She is responsible for project execution and delivery, besides working closely with infrastructure private equity client teams on research tasks. Aditi holds an MBA in Finance and Marketing and has a bachelor’s degree in Computer Engineering
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