Getting Granular: Swings in Private-Infrastructure Sector Returns
Private infrastructure has attracted increasing interest from investors over recent years given relatively high and stable returns at a global aggregate level. Average 12-month rolling returns from Q1 2009 to Q1 2025 were 11.8%, and during the two market downturns in the period — induced by the 2008 global financial crisis and COVID-19 pandemic — annual total returns barely moved into negative territory.
Infrastructure’s segment-level returns have varied more substantially than many investors might expect, however, as shown by an expanded sample of the MSCI Global Quarterly Private Infrastructure Asset Index. The broadened sample includes holdings data from closed-end funds, capturing opportunistic investment strategies.1
For example, for the 12 months through Q1 2025, the performance differential between the strongest-performing industry (public facilities) and the weakest industry (water) was nearly 17 percentage points. Water has been a consistent underperformer driven significantly by regulatory challenges, but other better-performing sectors have also seen cyclical volatility. Airports, for instance, suffered a sharp hit to returns during the travel restrictions of 2020. And conversely, renewable energy saw a positive spike in returns following the tightening of gas supplies during the early stages of the Russia-Ukraine war in 2022.
Such differential trends linked to sector-specific policy shifts, investor sentiment or commodity dynamics highlight the importance of segment granularity within an aggregate index.
Selected segments of the MSCI Global Quarterly Private Infrastructure Asset Index. Segments not shown are: power generation (excluding renewable energy), power transmission & distribution (excluding renewable energy), communication and transport (excluding airports).
The author thanks Girish Walvekar for his contribution to this quick take.
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1 The sample covers USD 220 billion of equity, which is more than three times the latest existing index sample.
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