In today’s increasingly volatile market environment, investors are seeking more than just returns; they’re looking for clarity, resilience, and long-term relevance. That search is leading many to a part of the market that’s often underappreciated during economic upswings – listed infrastructure.
Listed Infrastructure assets typically include companies that own and operate essential infrastructure, such as power grids, transport systems, and data networks, which generate steady income and are critical to major global trends such as urbanisation, digitalisation, and the shift to renewable energy.
As the global economy navigates interest rate uncertainty, geopolitical risk and signs of a cyclical slowdown, listed infrastructure has steadily emerged as a potentially compelling alternative in our view.
It includes companies that provide the services that underpin our daily lives, such as energy, transport, and digital connectivity, making them structurally important and economically fundamental. That inherent resilience is drawing fresh attention from investors who want to position defensively without sacrificing growth potential.
At a time when investors are balancing caution with the search for growth, listed infrastructure can potentially meet these objectives as one of the few places offering both.
Core sectors like telecom infrastructure, for example, tend to deliver steady cashflows and benefit from relatively low sensitivity to economic swings.
Meanwhile, areas such as energy and transport, though more cyclical in nature, can benefit from targeted investment and policy support tied to the energy transition and infrastructure renewal, in our view.
The digital infrastructure story is also evolving fast. Artificial intelligence (AI), cloud computing, and increasing data use are fuelling demand not just for connectivity but also for the energy and physical infrastructure that powers digital systems.
What began as a narrow telecom focus now spans power grids, data centres, and utilities. This shift has reinforced the relevance of infrastructure in a tech-driven world and deepened the investment case across an even wider set of sectors.
Valuation is another piece of the puzzle. Listed infrastructure companies are currently trading at meaningful discounts (around 25% on average) relative to comparable deals transacted in the private market last year.
That gap is drawing attention from private equity and infrastructure funds, particularly in regions like Australia, where takeover interest has been rising. While private capital often moves quickly on these opportunities, the public markets offer investors similar access, with greater liquidity and price transparency.
At a time when policy frameworks are playing a growing role in investment decisions, infrastructure also benefits from strong public support.
Major economies, from Germany’s energy transformation agenda to the US’ infrastructure incentives, are backing the sector in concrete ways.
But, unlike greenfield infrastructure projects, which can carry considerable construction and execution risk, most listed infrastructure companies are already operating assets with potential for predictable income streams. Where there is construction exposure, it tends to be secondary, not central to their business model.
While performance isn't the sole driver of investor interest, it's clear that listed infrastructure has demonstrated resilience during recent periods of market stress. Its inflation-linked cash flows have helped cushion volatility in a high-rate, high-inflation environment.
Additionally, engagement with the infrastructure sector has grown significantly. We are seeing appetite for listed infrastructure equity expand to being integrated into institutional portfolios as strategic allocations rather than the tactical plays they once were.
We believe the case for listed infrastructure in 2025 is robust. In a market where volatility is impacting many traditional sectors, infrastructure can stand out as a potentially compelling alternative.
With public markets offering attractive valuations, and the sector benefiting from secular growth themes and policy support, the moment for listed infrastructure appears not only timely, but long overdue.
For investors seeking resilience without stepping back from opportunity, it’s a part of the market well worth revisiting.
Giuseppe Corona is head of listed real assets at HSBC Asset Management. The views expressed above should not be taken as investment advice.