Investing in infrastructure: the scale of the opportunity

Infrastructure is one of the fastest-growing asset classes in private markets.¹ Nearly $1.8tn of private capital has been deployed across close to 10,000 infrastructure transactions in the past five years.² Deal count rose almost 40% in 2025 alone, and this activity extended into H1 2026, with UK deal count increasing 2% ahead of the same period in 2025. More than half of institutional investors now plan to increase their infrastructure allocations over the next three years.³

The capital is also being put to work. Dry powder has almost halved to 23% of assets under management, a sign that deployment is outpacing fundraising for the first time in the cycle.⁴

A broadening investor base

The composition of that capital is shifting. Alongside LPs and GPs, private wealth and family offices are now a distinct and growing force. Approximately 30% of family offices intend to increase their infrastructure allocations, drawn by the same characteristics that suit longer-horizon mandates: contracted cashflows, inflation linkage, and resilience through volatile markets.⁵ Private debt is following the same trajectory – its share of infrastructure deal count rose from 14% to 24% between 2021 and 2025, as lenders found the contracted returns they were looking for.⁶

This broadening of the investor base has introduced a wider range of investment mandates, holding periods, and risk appetites – and, with them, a more complex set of structuring and advisory requirements. We have seen transactions increasingly bring a family office, a GP and/or a credit fund into the same deal – with different return expectations, governance requirements and tax positions to reconcile. For the private wealth investor, the holding structure and tax position add a distinct layer of structuring complexity. This broader range of capital is becoming particularly important in early-stage investing where projects are more speculative and the risk-return profile is higher. 

The UK: a leading market

The geography of deal flow also deserves attention, with the UK representing the largest market for private infrastructure capital in Europe.⁷ Renewables have largely driven its growth, with data centres and wider digital infrastructure contributing a smaller share of activity in the country compared to global trends.⁸ However, the UK is not operating in isolation – jurisdictions across Europe are actively competing for infrastructure capital, with countries such as Germany, France, and the Nordics advancing their own pipeline of energy transition, digital, and transport projects to attract institutional and cross-border investment.⁹

Where capital is concentrating

The segments attracting private capital sit at very different points on the maturity curve, and each demands a different investment approach. We have organised the market around five categories:

Source: Macfarlanes analysis of Preqin Infrastructure Deals Database, Jan 2021 – July 2026.

• Data centres lead all segments by deal value – $63.8bn in 2025 alone, 2.5 times the 2021 figure. The segment has retained that lead into 2026, with transaction numbers up 63% in H1 2026 compared to the same period in 2025, with deal value largely unchanged.¹⁰ McKinsey estimates the sector will need roughly $19tn of investment to meet global demand by 2040.¹¹ Beyond the technology, each project is fundamentally a real estate and construction undertaking – requiring site assembly, planning consent, long-term leases, and power supply agreements before a single server is installed.
   
• BESS is the largest clean-tech segment by both volume and value, with deal count nearly doubling between 2024 and 2025.¹² Tolling agreements and long-term offtake have given lenders the predictable cashflow that merchant-only projects could not, and the International Energy Agency (IEA) reports BESS investment growing over 30% year-on-year in 2025.¹³ EV charging, meanwhile, recorded the highest private debt penetration of any segment at 35%.¹⁴
   
• Solar and wind are consolidating. In solar, falling technology costs mean fewer but larger transactions – concentrated around assets that already hold a grid connection.¹⁵ In wind, onshore remains Europe’s largest source of new renewable capacity, buoyed by the end of England’s decade-long restrictive regime in late 2024, while offshore faces cost pressures that are testing established financing models.¹⁶
   
• Hydrogen and CCUS remain early stage. Neither segment yet has the contract structures that institutional lenders typically require. The IEA expects global hydrogen spending to rise 50% in 2026 as earlier investment decisions move into construction, but falling deal counts reflect a slowdown in new commitments rather than in delivery. CCUS sits further back still.¹⁷

Mid-market and upper mid-market resilience

One structural feature of the market deserves particular emphasis. While headline fundraising has been dominated by blue-chip GPs – the top ten managers accounted for 44% of total 2025 commitments – mid-market and upper mid-market deal flow has proved more resilient.¹⁸ This section of the market can offer a broader range of exit options and more flexible strategies. From a deal perspective, these transactions also tend to involve more bespoke structuring – the equity, management incentive plans, tax arrangements are rarely off-the-shelf.

Looking ahead

Capital flowed into infrastructure faster in 2025 than at any point in the preceding five years, from a broader investor base, and through an increasingly complex mix of equity and debt. The effect is to widen the range of assets that can be financed – and, with it, the range of advisory challenges. The takeaway from this market overview is threefold:

• Watch the mid-market and upper mid-market. As the investor base broadens and allocations increase, this is where we expect much of the most actionable deal flow to emerge.
• Expect complexity. Sovereign programmes, cross-border capital flows, and the convergence of real estate, technology, energy, and security regulation mean that infrastructure transactions increasingly require coordinated advice across multiple disciplines.
• Follow the contract. The strongest capital deployment is in segments where revenue is contracted or demand is structural, like data centres and battery storage. Solar and wind are consolidating around grid-connected assets. Hydrogen and CCUS will depend on public support for some time yet.

The next section of this report considers how that capital is best structured: Investing in infrastructure: the capital stack.