The rise of ESG and infrastructure as an alternative asset class

Alternative asset classes such as infrastructure are gaining traction – especially where there is an ESG focus. We asked independent economic research firm Capital Economics to  examine this trend in more depth.

Industry observers expect the next 10 years to be generally less rewarding for investors in traditional assets than the last 10 years. As such, recent years have seen a rebalancing of many asset manager portfolios away from listed equities towards alternative assets, where returns may be stable and potentially higher on a risk-adjusted basis.

Asset classes such as infrastructure are gaining particular traction, with ESG-focused investments in particular seeing rising demand. Why is this? And how is the trend developing?

Our latest Capital Economics report takes a deep dive into how infrastructure investment is not only being used to support post-pandemic recoveries, but how it can also diversify economies away from their dependence on fossil fuels and towards greener and more environmentally sustainable technologies. It examines why ESG considerations are becoming an increasingly important component of infrastructure investing and looks at the range of infrastructure investment opportunities now being offered by different regions around the world.

We would be pleased to hear your thoughts on this opinion piece and look forward to engaging in further conversations on the issues that count as our industry continues to evolve.

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Read our other Capital Economics reports:

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• G7 tax deal garners broad support but is shrouded in ambiguity

• Inflation poses risks for private equity but policy backdrop should continue to be supportive