A highly functional and modern infrastructure is the foundation of economic development and essential for upholding people's quality of life. So it is vital to invest in the road and rail networks needed to transport people and goods, in clean power generation and digital infrastructure, and in meeting the basic human needs for clean water and sanitation.
The global demand for infrastructure investments up until the year 2040 is expected to be around $100 trillion. A further $3.5 trillion will be required to meet the United Nations Sustainable Development Goals for power and water. The need for infrastructure spending varies by region, with Asia accounting for about 60 percent of the estimated global requirement, followed by the Americas (17%) and Europe (16%). In terms of sectors, electricity and roads are the biggest investment targets, and together they will account for 65% of the global infrastructure spending until 2040.
Against this background, equity investments in infrastructure are an attractive proposition. The asset class has a low correlation to other asset classes, can offer inflation protection, and it represents a valuable alternative for diversifying capital investment. Those who also take into account megatrends such as climate change or digitalisation make their portfolio more resilient, can achieve higher returns over the long term at the same level of risk, and contribute to the positive transformation of industry and society.