Unlisted infrastructure in 2026 and why selectivity matters

As we’ve recently explored in Preqin First Close, infrastructure’s having one of its more fashionable moments among investors.

Traditionally, some LPs have shown interest in unlisted infrastructure for its potential to generate relatively stable income (often contract-based), increase exposure to inflation-linked revenues, and support portfolio diversification.

Since the start of 2025, Ardian, Brookfield, Copenhagen Infrastructure Partners, EQT, Global Infrastructure Partners (GIP), KKR, and Partners Group have all raised $10bn-plus infrastructure vehicles, according to Preqin data. (GIP, like Preqin, is a part of BlackRock).

However, just as investors take carefully differentiated approaches to asset classes such as private equity and private credit, they may also need to be selective about the unlisted infrastructure funds and managers they back. Strategies range across core, core-plus, value-added, opportunistic, and debt, with various expected risk-and-return profiles.

The growing footprint of data centers is hitting headlines every day. But in Preqin First Close, we’ve also reported on mid-market infrastructure deals in North America; renewable energy, transportation, and industrial decarbonization in Europe; increased investor attention on Latin America; and electrification globally.

A selective approach by investors matters given the dispersion of returns. In the Q2 2026 update for subscribers to Preqin’s Private Markets Research (PMR), infrastructure and natural resources specialist Alex Oppong writes about a ‘wide range of outcomes beneath the headline numbers’.

For example, the 2022 vintage of unlisted infrastructure funds currently has an upper-quartile net IRR of 21.1%, compared with a median of 11.8% and a lower-quartile boundary of 5.3%. The spread is even wider for 2023 vintages (Fig. 1).

Fig. 1: Upper-quartile net IRR highest for 2022 vintage
Net IRR by vintage*

_{*Excludes data for infrastructure debt, fund of funds, and secondaries strategies
Source: Preqin, data as of July 13, 2026}

_{This chart is taken from Infrastructure Q2 2026: Preqin Quarterly Update, a Preqin Private Markets Research report.}

‘This dispersion is particularly relevant when comparing mid-market and larger infrastructure funds’, Alex says. Mid-market infrastructure is often associated with greater scope for value creation, but smaller funds don't automatically outperform.

As the report suggests, ‘outcomes vary by strategy and manager’. Plus, LPs need to be aware that ‘historic performance is an important consideration, but the bigger question is whether managers can show that performance is repeatable.’

Although only eight infrastructure funds reached final close in the second quarter of this year, totaling $4.4bn (compared with 27 vehicles and $25bn raised in Q1), Alex reports that ‘interim close data suggests capital continued to move into the asset class’, with funds securing $57bn in H1 2026 (compared with $69bn in H1 2025). The PMR report indicates that the world’s capital needs across power, digital connectivity, energy security, transport, modernization, and defense will continue to demand investment.

As of early July, there were 731 infrastructure funds in market globally, seeking a combined $463bn – no doubt hoping unlisted infrastructure remains à la mode.

Mid-market opportunities in North America

North America – led by the US – dominates unlisted infrastructure, according to our investment data.

Fig. 2: Two in five funds in market target North America
Infrastructure funds in market, by primary region focus

_{Source: Preqin, data as of July 6, 2026}

_{This chart is taken from Infrastructure Q2 2026: Preqin Quarterly Update, a Preqin Private Markets Research report.}

As of July, there were 297 funds in market with a preference for the North America region, compared with 242 for Europe, 84 for APAC, and 10 for the rest of the world (Fig. 2).

In a Strategy in Focus report (for PMR subscribers), Alex assesses infrastructure’s mid-market, where the majority of the deal activity takes place. He highlights that more than 90% of transactions occurred below the $2.5bn mark in 2020–2026, even as fundraising became concentrated in larger funds, which tend to finance bigger deals.

North America saw a surge in capital raised for mid-market funds last year – $61.6bn, or 55% of the total raised worldwide, compared with $27.7bn and 33% in 2024, and $22.4bn and 38% in 2023.

Energy security and resilience have become even more pressing during the Ukraine and Gulf conflicts. Oil and gas supply is key, but the transition to low carbon is also continuing to gain momentum. Alex highlights that there were more mid-market infrastructure deals in renewable and conventional energy in 2020–2026 than in the digital, transport, or utilities sectors.

Unlisted infrastructure funds raised a record $216.1bn in 2025, up from $135.5bn in 2024. Core, core-plus, and value-added strategies still predominate in the mid-market, ahead of debt and opportunistic.

It’s not easy for new GPs, writes Alex, in ‘an environment where scale and track record are prioritized’. But there’s potential in the mid-market to develop assets, build-out, improve operations, and do platform deals.

Origination can be ‘relationship-led, with less competition and more attractive entry valuations’, as well as moderate leverage.

Data centers have become a major driver of investment in US-focused unlisted infrastructure, including a variety of new link-ups, with major financing agreements announced nearly every week.

That means big private capital deals too. In August, technology multinational Nvidia announced strategic partnerships to establish independent compute financing platforms with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR. Subject to final agreements, the partnerships aim to ‘mobilize over $500bn of third-party capital for the buildout of AI infrastructure over time’.

Growth is partly financed by many forms of lending, including private credit. And it’s also fueling US power and utility M&A, which hit a record $203.6bn in the first five months of 2026, according to Deloitte and the FT, with data centers accounting for $151.5bn.

Specialist data provider Aterio has tracked 3,639 announced data centers in the US as of July, up 35% from 2,686 in December. There are currently 2,024 active and 762 under construction – with a vast potential combined capacity of 316.9 GW.

Europe’s green electrons

Europe could be catching up with North America in unlisted infrastructure funds. Both regions are on course to top $1.2tn AUM in 2030, as forecast by Preqin’s PMR team.

Eric de Montgolfier, CEO of representative association Invest Europe, told Preqin First Close earlier this year that ‘infrastructure is one of the clearest opportunity sets’ because of the demands of the energy transition, digitalization, and broader competitiveness.

In energy, the EU reached a landmark last year when wind and solar overtook fossil fuels in power generation for the first time.

In PMR’s mid-market infrastructure report, Alex describes how ‘Europe’s fragmented opportunity set, strong policy alignment, and legally binding decarbonization targets under the European Climate Law continue to underpin sustained mid‑market investment across renewables, grids, and flexibility solutions.’

Fig. 3: Deals below $500mn in size are more common in renewable energy
Proportion of global infrastructure deal count between 2020 and 2026 YTD*, by sector and deal size

_{*YTD to February 25, 2026
**Includes logistics, economic, and diversified sectors
Note: Deals at upper bound of size range are excluded
Source: Preqin, data as of February 25, 2026}

_{This chart is taken from Strategy in Focus: Mid-market infrastructure, a Preqin Private Markets Research report.}

Speaking with Preqin First Close, Mads Lerche Holstein, Partner, Investments at AIP Management, a renewable energy and infrastructure firm, explains the opportunity in Europe.

‘It means we can invest in green electrons, or renewable generation assets. And we can also invest in what we define as the demand side – decarbonization – of which one example is electrified transportation, and another is industrial decarbonization.

There’s geographical as well as technological diversity. ‘Within the energy transition, we have a relatively broad spectrum to play with to invest where the risk and returns are best at any given time.’

Mads highlights battery energy storage systems (BESS). In the UK, the firm has invested in Ardenham, a large-scale BESS portfolio of three sites in Southeast England and the Midlands, and Coalburn 2, a standalone project in Scotland.

Investment bank UBS says BESS demand is growing sharply because of ‘lower costs, strong policy support, and rapid growth in key regions’.

Mads says offshore wind is also another big opportunity. Although there’s still a regional and national pattern of regulation and fundamentals underpinning each energy market. ‘There’s a stronger push for energy resilience, which creates a more European pathway – especially for electrification, in which renewables play a key part.’

‘Electrification is putting the energy we produce to good use in an efficient manner. It’s about electrifying industrial processes that are today using gas, for example.’

AIP has owned electric trains since 2020. Mads says there’s electrification across the transportation sector, including trucking and public transit. ‘It’s a less mature area than passenger vehicles, but we’re seeing an increasing adoption of electric heavy-duty vehicles and buses.’

‘People can relate to the transport electrification story, where in a very efficient manner you can bring the green electrons we produce into use to get more bang for your buck – good value for your green electrons.’

The ‘Age of Electricity’

In its report World Energy Investment 2026, the International Energy Agency (IEA) explains that capital is critical for affordability, security, and resilience. ‘Investment in efficiency and electrification can reduce exposure to volatile fuel markets, lower import dependence, and ease pressure on energy systems during supply disruptions.’

Electrification is expanding rapidly but unevenly, according to the IEA, with investment growing at around 15% year-on-year – including in heat pumps, EVs, and industrial processes. And electrification accelerates ‘when infrastructure, prices, and finance align.’

The agency also suggests that events in the Gulf could mean a step up globally, bringing ‘the Age of Electricity even more clearly into view: electricity-related spending already makes up nearly 60% of all global energy investment’. It estimates investment in electricity supply and infrastructure could be worth as much as $2tn this year if end-use electrification is included in the total.

Investment manager Schroders goes as far as to argue that in the digital age, ‘electricity is assuming an economic role comparable to the one oil played during the industrial age.’ That includes energy risk and energy security. It’s no longer a background utility, but ‘a core determinant of economic competitiveness’.

Goldman Sachs highlights the energy crunch in Europe’s shift to electrification. The Gulf conflict has increased pressure in Europe to improve energy security. Electrification, along with AI-related activity, could boost power demand by 1.5–2% per year in 2026 and 2027, before accelerating to 2–4% per year by the end of the decade, according to the investment bank.

It reckons renewables will continue to be an attractive opportunity for companies, because of their ‘lower levelized cost of electricity and faster time to market’.

The IEA describes corporate decision-making as key for efficiency and electrification. More than half of industrial investment is funded directly from balance sheets or by corporate debt. ‘As a result, financing conditions and commercial risk considerations remain the dominant filters for determining where capital will flow.’

We’ll need a lot more innovation. Min-kyeong Cha at the London School of Economics summarizes three big challenges in rethinking energy in an electrified world.

The first is intermittency, because of the variability of renewable sources.

The second is infrastructure – including ‘significant upgrades to transmission networks’.

The third comes from supply-chain vulnerabilities – such as the availability of critical minerals to manufacture clean energy equipment. ‘For businesses, it introduces procurement risk, price volatility, and regulatory scrutiny around responsible sourcing.’

Let’s get geophysical

Innovation is another key factor – and potential opportunity – for investors.

Geospatial analytics is a growing field that uses location-based data, combined with attributed data and modeling, to monitor the physical environment.

Hayden O’Bryan, an Associate in the Preqin Sustainability team, described recently in Preqin First Close how some of the first instances of geospatial modeling used in finance originated after Hurricane Andrew in Florida in 1992. Insurers’ actuarial models underestimated the costs of the storm, but catastrophe (cat) models based on geospatial data provided much more accurate estimates.

This enabled a new field of insurance-linked securities – cat bonds – that used models to precisely price the risk of natural disasters. In turn, the insurance-linked securities market grew 10.5% year-over-year in 2024, with cat bonds reaching over $17.2bn of primary issuance that year.

Since the nineties, geospatial modeling has been introduced across public and private asset classes. Use cases fall into two broad categories: forecasting and monitoring.

Forecasting is the more established application of both specialized and general-purpose models for projecting the physical risks facing assets under different climate scenarios, such as those devised by the Intergovernmental Panel on Climate Change (IPCC). To translate these environmental impacts into economic impacts, climate models are paired with models created by institutions such as the Network for Greening the Financial System (NGFS).

As an example, Preqin provides data to help real estate investors assess assets’ physical risk for 2030, 2040, and 2050 across two IPCC scenarios.

Looking at US real estate assets in the context of a high-emissions scenario, nearly 5% are at high risk of inland flooding by 2050, according to Preqin data. Investors can use such metrics to inform valuations and take these types of risk into consideration when managing portfolios.

Traditionally, modeling for physical risk has focused on long time horizons to capture looming impacts of climate change on valuations. However, to make insights more immediately actionable, organizations such as the NGFS have recently published short-term, five-year scenarios that are more in line with business planning and policy.

Beyond forecasting, monitoring has also been increasingly used to track agriculture, logistics, and shipping. In agriculture, satellite data has played a key role in increasing efficiency on farms, such as highlighting discrepancies in soil quality to help determine optimal fertilizer application.

In shipping, geospatial analytics has been used to track vessels through the Strait of Hormuz during the Gulf conflict.

Applications of geospatial analytics continue to expand. As these technologies develop, investors will continue to find novel use cases that provide key insights into volatile environments.

Shaun Beaney is Editor of Preqin First Close.

Second Look is edited by Libby Fennessy, Production Editor of Preqin First Close.

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Read the original newsletter stories:

Infrastructure funds in market aim to raise $463bn as investors take bespoke approach

Charging up Europe’s infrastructure with green electrons Private capital critical in 'The Age of Electricity'

Geospatial analytics – let's get physical

_{The opinions and facts included in the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin accepts no liability for any decisions taken in relation to the above.}