Investor demand for infrastructure asset mandates intensifies: bfinance

A new analysis shows momentum in private market search activity for real assets, including infrastructure, remained strong among institutional investors in the first quarter of 2026, despite private markets slowdown.

According to bfinance's Q1 2026 Manager Intelligence and Market Trends Report, institutional investors are displaying more appetite for infrastructure, with the asset class accounting more than a quarter (27%) of private market mandates, compared to only 13% on the previous corresponding period.

The increased attention also lifted real assets to account for more than half of total private markets activity. Real estate's share was stable at 24%, broadly unchanged from 23% over the previous 12-month period to 31 March 2025, it said.

Private equity activity was also steady (22% versus 21%), while private debt searches fell from 35% of segment activity in 2025 to 27% in the year to end March 2026, bfinance said.

It comes as the period was marked by a "weaker start" to the year, with global fundraising falling to its lowest level since 2015. bfinance said it is due to re-intensify caution among investors amid heightened geopolitical uncertainty.

"Real estate was particularly impacted, with fundraising effectively stalling in Europe and only a handful of US focused funds reaching closes above the US$1 billion mark, reflecting the pressure of persistently high interest rates," the report said.

"Against this backdrop, private equity showed clearer signs of resilience, particularly in buyout and secondary strategies."

The report noted private debt fundraising also lost momentum over the quarter. Weighed down by negative flow linked to the "SaaS apocalypse", driven by AI-related volatility.

Despite the heightened attention, infrastructure fundraising was also subdued over the period, largely reflecting a lighter calendar of mega fund closings rather than a material deterioration in underlying investor appetite, bfinance said.

"Against this backdrop, spreads have widened and activity in the broadly syndicated loan market has softened, potentially improving the opportunity set for private lenders," the report said.

"For disciplined managers, periods like this can support better pricing and, often, stronger lender protections and tighter documentation."

The report gathered responses from some 620 bfinance clients across 47 countries, including Australia, representing over US$9 trillion in assets.

It comes as Quay Global Investors portfolio manager Chris Bedingfield said opportunities in listed real estate are emerging as the strongest opportunities away from data centres and AI-linked infrastructure.