Infrastructure is delivering where it counts

Infrastructure has emerged as one of the standout performers in portfolios—and for good reason. While markets remain volatile, infrastructure assets provide something increasingly valuable: consistent returns backed by essential services that economies simply can't function without.

These aren't speculative investments—they're the roads, energy networks, and digital systems that keep modern life moving. That fundamental necessity is exactly what makes them so compelling for long-term investors.

Why Infrastructure Keeps Delivering Strong Performance

Infrastructure assets have a unique advantage that many other investments simply don't have. They operate under regulated frameworks or long-term contracts that provide predictable cash flows, often with built-in protection against inflation.

Think about it this way: when you pay your electricity bill or use a toll road, you're contributing to cash flows that have been contracted for years, or even decades, in advance. These aren’t businesses that depend on consumer sentiment or economic cycles—they provide services that people and businesses need regardless of market conditions.

The sector also benefits from high barriers to entry. It's not easy for competitors to build a new electricity grid or major highway system. This creates natural monopolistic positions that protect returns over time.

Real-World Example: Energy Storage Infrastructure

Battery storage is a great example of how infrastructure is changing to meet new energy needs while still offering steady, reliable returns. These assets play a key role in keeping the electricity grid stable, helping more renewable energy enter the system and making sure the power stays on when it’s needed most.

The investment appeal lies in essential service provision combined with long-term contracted revenue streams. Rather than betting on volatile energy prices, battery investments typically feature:

• Capacity Payments: Steady income for being available when the grid needs stability

• Tolling Agreements: Long-term contracts that provide stable returns regardless of electricity price swings

• Essential Services: Grid firming capabilities that become more valuable as renewable energy grows

A recent battery investment showcases these principles with a 12-year tolling agreement with a creditworthy partner. This structure eliminates commodity price risk while providing exposure to the growing need for grid services as renewable energy expands globally.

What This Means for Your Portfolio

Infrastructure offers several advantages that are particularly valuable in today's investment environment:

• Inflation Protection: Many infrastructure investments have built-in escalation mechanisms that help protect purchasing power over time

• Stable Income:  Predictable returns from contracted or regulated cash flows

• Growth Potential: Exposure to long-term megatrends like energy transition and digitalisation that will drive demand for decades

• Diversification: Performance that's typically less correlated with traditional share and bond markets

The Road Ahead: Why Infrastructure's Best Days May Still Be Coming

Global trends such as the energy transition, digitalisation, and demographic changes will continue to drive investment needs in infrastructure for decades. For investors seeking reliable, inflation-protected income and long-term growth, infrastructure remains an attractive and sometimes underappreciated opportunity. As knowledge within the asset class deepens, infrastructure is well-placed to keep delivering compelling, risk-adjusted returns.