Infrastructure investing is firing on 'every single cylinder'

00:00 Speaker A

So, uh, infrastructure spending in the last year or two has become sort of shorthand for data centers. But we’re here we’re talking about the whole thing. Um, and when you look at what’s going to drive that spending through 2030. Is it going to be mostly the data center, um and that ecosystem, or what are we talking about here? Where that growth is coming from?

00:26 Speaker B

Well, it’s interesting because data centers, it’s right when you talk about infrastructure, hijacks a lot of the attention. Um, but infrastructure is really not static. You know, we’ve been investing in this asset class for 20 years. And when we started, people thought infrastructure was all about roads and ports and airports and regulated utilities, and that was it. And there was no, digital infrastructure did not exist, renewable energy did not exist. Um, and then you fast forward to today and when you talk about

01:06 Speaker B

infrastructure, you think of digital, and then you think of data centers. Uh, the truth is, infrastructure is really firing from every single cylinder that it represents today. You think of transport, the capital required to upgrade all of our stock of, you know, ports, roads, airports is massive. You think of energy, all of the investments for the energy transition, massive, digital, you talked about it, data centers, all of the energy to power the data centers. It’s a huge demand for capital. And I think we are today at a point when the supply of capital is greater than it’s ever been. So infrastructure as an asset class has really grown to 1.5 trillion dollars today, coming from 50 trillion when we started, but the demand for that capital is also massive. And again, you know, energy is a big part of it, but it’s, you know, it’s really the demand is there for every single subsectors we invest in.

02:08 Speaker A

So, there’s a lot of demand, there’s a lot of capital. It is private investment, but infrastructure as an asset class is perhaps unique in that it also needs that public component, whether it’s policy, whether it’s co-investment, whether it’s regulation. So, where are we on that front?

02:37 Speaker B

So, one one way to think about this is when you invest in infrastructure, a little bit like real estate, you have a concept of core infrastructure. Think of it as your roads and your airports and your electricity and your gas. But then you have a core plus and a value add where you move up the risk spectrum. If you think of core, you do need government subsidies. You need you do need government contracts. But as you move up the risk spectrum and you go to value add, that need for subsidies, for contracts is much less important. And so you, there will be lots of different places that will require government help, some that will not. We tend as an investor to focus on value add where we don’t need government’s help. We like to go where we know that what we invest in works on its own, on a standalone basis without subvention, you know, subsidies if you want.