Despite a backdrop of high inflation and rising rates globally, industry experts have highlighted the importance of listed infrastructure investments. The reasons are threefold: public policy, secular growth and fiscal policy. Firstly, public policies around the world are prioritising energy security, especially with the supply constraints due to the Russia/Ukraine war, and in order to achieve this a great deal of infrastructure will need to be built. This leads in to secular growth, since governments have started to agree to net zero and energy transitions targets by 2050. To achieve these targets trillions of dollars of investment into the sector will be needed. Lastly, fiscal policy is geared towards energy transition. Economically, it does not make sense to build any energy sources other than renewables thanks to tax credits for sectors like solar and wind.

For countries to achieve net zero targets by 2050, we will need to generate at least 2x the electricity we generate today, “which means we'll need more power sources and expanded transmission.” According to a Senior Portfolio Manager at ClearBridge Investments, at least $2.5 trillion needs to be deployed by 2030 to reach net zero by 2050. In the current climate, investing into publicly listed infrastructure can prove more appealing than unlisted thanks to a historically lower-volatility offering and a devaluation in the unlisted space due to higher bond yields increasing the cost of capital and discount rates.