New study shows fundraising surge, $1.6T AUM and widening sector bets
Private infrastructure investing is regaining momentum after a difficult two-year stretch, with fundraising rebounding sharply and investors concentrating capital in the industry’s largest managers.
In its latest annual outlook, Infrastructure Strategy 2026: A Year of Increasing Scale and Diversification, Boston Consulting Group says the asset class has begun to recover from a period marked by weaker fundraising, declining deal activity and heightened macroeconomic uncertainty.
“Private infrastructure investing has recently passed through two challenging years,” the report states, noting that fundraising dropped by nearly half in 2023 and improved only slightly in 2024 as inflation, higher interest rates and regulatory concerns weighed on portfolios.
Despite those headwinds, returns largely remained within historical ranges, reinforcing infrastructure’s reputation for delivering steady, relatively inflation-resilient performance. Still, volatility increased and holding periods for portfolio companies lengthened, with more exits executed through continuation vehicles.
BCG found that infrastructure assets under management climbed to $1.6 trillion by the first half of 2025 — a 22% increase from the same period a year earlier — while global fundraising reached $211 billion, roughly 60% higher than in 2024.
The recovery stands in contrast to other private market segments, many of which continue to struggle to attract capital amid stronger public equity returns. BCG said infrastructure fundraising has benefited from investors’ continued confidence in the asset class’s long-term stability and cash-flow characteristics.
Mega-funds gain ground
Limited partners are increasingly favoring scale. The report found that nearly three-quarters of new capital raised in 2025 flowed to the 50 largest infrastructure funds, with the top five vehicles alone capturing close to half of allocations.
BCG expects this dynamic to reshape the industry into a more pronounced “barbell” structure, in which mega-platforms consolidate market share while smaller specialist managers build defensible positions in niche subsectors and strategies.
The shift also reflects LPs’ willingness to take on more risk in pursuit of higher returns. Investors are directing significant capital toward core-plus and value-add strategies, pushing general partners to expand their opportunity set beyond traditional assets such as pipelines, toll roads and utilities.
Increasingly, infrastructure managers are targeting investments in services, agriculture, contract manufacturing and other emerging areas that offer consistent demand and recurring cash flows, according to the report.
Operational performance becomes critical
Infrastructure funds continue to deliver consistent returns, with recent vintages posting internal rates of return above 11%. Larger funds tend to generate less volatile performance, while smaller funds often achieve higher average returns, albeit with greater variability.
BCG said operational value creation is playing a growing role in sustaining performance. Over the past five years, margin expansion has become a more significant driver of enterprise value, highlighting the importance of pricing discipline, commercial rigor and efficiency improvements — including the adoption of artificial intelligence — across portfolio companies.
Long-term structural trends continue to underpin investor appetite. Population growth, urbanization and decarbonization initiatives are fueling demand for infrastructure investment globally, while rapid digitization — particularly the surge in artificial intelligence workloads — is driving strong interest in data centers and connectivity assets.
At the same time, some renewable energy investments face near-term pressure from rising costs, shifting subsidies and lower power capture prices in certain markets. That has prompted investors to explore adjacent opportunities such as grid modernization, energy storage and flexible generation solutions.
BCG also noted that infrastructure portfolios are becoming more diversified. Since 2015, exposure to emerging segments including data centers, waste management, broadband fiber and equipment leasing has grown from just 3% of holdings to nearly 20%.
Overall, the report concludes that private infrastructure is entering a new phase defined by larger fund platforms, broader sector exposure and a sharper focus on operational execution. Even as deal activity remains below historic peaks, BCG said investor confidence in the asset class remains strong — positioning infrastructure as a central pillar of private market allocations in the years ahead.
