For investors looking to reap private credit’s potential benefits of attractive income generation, inflation mitigation, lower volatility and asset-liability matching, Brookfield believes that infrastructure debt is a compelling choice. It offers the potential for attractive risk-adjusted returns with significant potential downside mitigation, as well as diversification benefits. Infrastructure debt also benefits from the unique characteristics of infrastructure assets, particularly those providing essential services in markets with high barriers to entry and consistent cash flows.

In addition, infrastructure debt stands to benefit from tailwinds to infrastructure growth—what we call the “Three Ds”—of digitization, decarbonization and deglobalization, along with rising fiscal support and strong corporate demand for clean power. Brookfield estimates that these megatrends will drive an infrastructure supercycle to the tune of $200 trillion in investment over the next 30 years. With infrastructure and renewable assets typically financed 50%-70% debt to cost, we expect a significant share of this capital deployment opportunity to be in debt.