2020 and the short term outlook

The world’s rapid adjustment to Covid-19 conditions revealed gaps for many markets. From social to digital infrastructure, it was clear that there was investment required in many areas. Data and fibre, in particular, were validated as critical infrastructure and relatively ‘future-proof’, with a surge in deals in this area – such as UBS AM’s investment in Altitude Infrastructure THD (DC advised UBS AM) [1], ICG Infra’s investment in the German FTTH operator TNG (DC advised ICG Infra) [2], and USS’s investment in UK broadband operator, G.Network (DC advised USS) [3].

Disruption to infrastructure in 2020, was therefore minimal, with the notable exception being transportation. All forms of passenger transportation were affected due to the global lockdown – with commercial flight activity almost 75% lower than 2019 by mid-April [4]. But, while this was prominent in the short term, we believe it’s unlikely to create a lasting impact. Indeed, in the US, president-elect Joe Biden’s plans for his first 100 days in office include investment into core infrastructure (e.g., roads and transportation, a largely bipartisan issue that could gain support in light of the global pandemic) [5].

Long term outlook

As markets begin to reopen, it is unlikely that working patterns will return to their previous state in the short term. This transition to more flexible working arrangements, however, is unlikely to impact the clear focus on digitisation across markets.

Digital infrastructure and virtualising the economy is an integral part of future proofing markets looking forward. As the world generates more and more data, and new technologies such 5G are introduced, we can expect a lot of new infrastructure assets born from future innovations.


2020 impact and short term outlook

2020 saw a huge focus on ESG and sustainable investment, continuing 2019’s trend, and driven by:

  1. New initiatives from organisations under which large asset managers operate, promoting environmentally friendly opportunities - many committing to, for example, the UN sustainable development goals [6]
  2. Investors in private equity funds with a clear focus on ‘ESG’ deployment of capital, which continues to drive the sourcing of opportunities that comply with key criteria
  3. Covid-19’s acceleration of energy consumption reviews – already impacting oil and gas infrastructure investment where there may not have been consequences previously [7]

The impact of these sustainable investment drivers are translating into renewable investment activity. Our partners, Green Giraffe, saw a noticeable increase in appetite from investors for established renewable energy sectors, such as onshore wind, and solar [8] as well an increase in mandates on projects in less established, but rapidly growing sectors (e.g., floating offshore wind, electric vehicle charging). Debt and equity deal completions continued throughout lockdown throughout the year, indicating that the sector is growing to become a core area of development for many markets [9].

Long term outlook

With this trend firmly underway and as public attitude towards renewable energy continues to be positive, energy produced from renewable sources is becoming cheaper than the fossil fuel equivalent and governments across Europe continue to announce and implement ambitious plans for carbon reduction [10]. In the US, president-elect Joe Biden has already committed to a slew of environmental orders to be issued in his first 100 days in office [11]. We believe, alongside our partners at Green Giraffe, that the future of energy infrastructure will develop along parallel tracks:

  1. As existing renewable technology such as onshore wind and solar becomes more developed, the price of delivering them is more competitive. Corporates are increasingly seeking to procure green energy and are likely to overtake governments as the catalyst for investment in dedicated projects, through direct private wires or synthetic power purchase agreements via national grids. The question for the future is therefore how to successfully integrate renewable energy into existing infrastructure. We believe smart grids, storage mechanisms / factories and integration technology will continue to develop and generate further interest
  2. New technologies, such as hydrogen networks and grid scale storage, will likely start to see increased activity and we expect to see an upward trajectory in the number of greenfield assets for investment. This is already evident in the UK, where the first hydrogen project has been approved [12] 

Supply and demand of assets

Moving into 2021, the continued disruption to ‘normality’ could mean infrastructure investment continues to thrive. Given the demonstrated attractiveness of the sector, including strong yield returns in a low interest rates environment, and long term visibility, the demand for assets is at an all-time high. This demand is not restricted to local investment, as there continues to be an interest from Asia and other geographies for investment in European infrastructure [13].

This demand, however, is not matched by the supply of assets, which are limited, and could mean:

  1. Capital will be deployed into sectors that have previously not been considered infrastructure. These areas will likely carry higher risk with less asset–heavy tendencies, and a more service based focus, however will still provide an opportunity for diversification. This diversion to alternate asset types is already evident from 2020, with investment into areas such as smart metering – into which, just 18 months ago, there were few assets and funds investing – but in 2020 we have seen increased activity with impressive results. For example DC advised on the sale of MapleCo to Equitix, a transaction in which there was a great deal of interest [14]
  2. In a bid to compete, funds will likely start to deploy lower levels of capital, smaller initial investments and then look to grow organically, creating the potential to develop platforms where further capital can be deployed

These factors, coupled with continued growth in renewable energy and digitisation, not only in existing areas, but also in new technologies and greenfield developments, will drive the infrastructure sector forward and expand the definition of ‘infrastructure investment’.


The global pandemic may be a consistent disruption globally but infrastructure investments have both endured and accelerated. The sector is primed to continue its growth not only through core areas but also in new and developing assets classes and technologies. There is an exciting opportunity ahead for those willing to invest in these emerging trends and we believe that the expansion of the sector will be one to watch.

To learn more about our strategic partner Green Giraffe’s activity in the renewable energy market, see here.


  1. DC Advisory acted as exclusive financial advisor to UBS Asset Management on its investment in Altitude Infrastructure, DC Advisory, September 2020

  2. DC Advisory acted as exclusive financial advisor to ICG Infra on the acquisition of a significant majority in TNG & raising of a capex facility, DC Advisory, December 2020

  3. DC Advisory advised USS on its investment in a joint controlling stake in G.Network, DC Advisory, December 2020

  4. Changes in transport behaviour during the Covid-19 crisis, IEA, May 2020

  5. What can President-elect Biden get done on energy in the first 100 days? PV Magazine, November 2020

  6. Long way to go: How asset managers engage with UN SDGs, Citywire Selector, September 2020

  7. Caution creeps into investors’ oil and gas infrastructure appetite, Petroleum Economist, July 2020

  8. Green Giraffe Projects, Green Giraffe, 2021

  9. Crisis speeds redefinition of infrastructure assets, Allen & Overy, October 2020

  10. 2021 renewable energy industry outlook, Deloitte, 2020

  11. Biden will go green in first hundred days president, The Times, November 2020

  12. UK Hydrogen energy project gets planning permission, Renewables now, September 2020

  13. Infrastructure investment to be a key driver of growth in emerging markets post COVID-19 crisis, sigma says, SwissRe, June 2020

  14. DC Advisory acted as sole financial advisor on the sale of MapleCo (backed by OMERS, OTPP & SSE) to Equitix, November 2020