Over the last few months, CoreData’s research has found that investor appetite for infrastructure investments remains unabated. Stable real returns, inflation protection and structural tailwinds such as the energy transition and digital connectivity are all contributing to its sustained appeal.
One example of this is the Natixis Institutional Investor Study which shows 38% of investors will increase infrastructure investments in 2026.
Other data sources further support this narrative. The Aviva Investors Private Markets Study 2026 found that 36% of asset owners plan to increase allocations to infrastructure equity over the next two years, and 28% to infrastructure debt. And institutional target allocations to infrastructure rose to 6.2% in 2026, according to Hodes Weill and Cornell University’s Brooks Center for Infrastructure.
While the asset class has now become a core allocation for many institutional investors, there is also growing demand from wealth managers to gain exposure within client portfolios. However, the challenge has been aligning infrastructure’s characteristics with the expectations of individual investors.
As asset managers work hard to provide infrastructure products to all investor types and satiate the appetite seen in the wealth segment, we explore whether the evergreen structure is well suited to these assets or whether the industry is trying to fit a square peg into a round hole.
Optimising the asset mix for the wealth channel
Infrastructure is inherently a long-term, illiquid asset class. How can this be made to fit an evergreen or semi-liquid structure, without losing the essence of the investment?
“There was always demand from wealth clients to invest in infrastructure. The difference is that we were finally able to provide them with a structure with features designed more specifically for them,” says Dominik von Scheven, Managing Director on the Infrastructure and Real Assets team at private markets specialist Hamilton Lane.
He explains that the Hamilton Lane evergreen infrastructure products only invest in assets that put capital to work immediately: “We invest in direct co-investments and secondary deals. This means that if an investor gives us a dollar, that dollar goes to work on day one.” Von Scheven says this combination of assets also allows the funds to be broadly diversified while allowing Hamilton Lane to start paying distributions earlier as well.
“It’s just repeating the ideas and structures that were developed in private equity… with a time lag,” points out Marc Wicki, Partner and CEO of SFP Infrastructure Partners. Therefore, given the rise of semi-liquid and retail-oriented structures on the private equity side he says it was only a matter of time until the infrastructure market would also adopt these solutions.
But designing infrastructure products around distribution needs could lead to funds being shaped by adviser usability rather than investment considerations. Something which according to Wicki is definitely a risk.
“The assets are illiquid in nature since infrastructure, generally speaking, is longer-term assets held for 20, even 25, years,” he says. “Putting such an asset into a liquid structure is trying to square the circle.”
However, he argues that as long as managers have distinct product offerings and do not commingle institutional and retail money, then an evergreen structure can work. In practice, this means having parallel feeder funds or master-feeder structures. This allows retail and institutional money to remain separate while pooling the capital into a single portfolio.
But the liquidity offered within infrastructure evergreen funds does not mean all the investors in the fund can redeem their shares in one day. “People do need to understand that this should be viewed as a long-term investment, it is not a liquid portfolio. This is a structure with an option for periodic liquidity, with redemptions capped at 5% of assets per quarter,” von Scheven explains.
This warning is echoed across the industry. Analysis from Morningstar notes that redemption gates during periods of market stress remain at the discretion of fund boards, and that recent redemption pressure in some credit funds reflects a structural reality that investors are becoming increasingly aware of.
For example in the private credit space, Blue Owl Capital notoriously faced a rush of redemption requests when investors requested to withdraw 40.7% of the fund’s shares in a single quarter against the standard 5% quarterly redemption gate.
Structuring funds with a redemption cap protects them from being forced to sell off illiquid private credit loans at steep discounts. Further, in Blue Owl’s case, the underlying loan quality remained stable. However, the episode highlighted the importance of educating investors about what the redemption cap means in practice.
According to von Scheven, the key to making infrastructure work for this semi-liquid structure is being selective about which assets to include in the fund. Managers need to have the right skill sets, network and sourcing capabilities to run such products, he says. “We have a dedicated portfolio construction team for the evergreen structures because you need a very different skill set compared to running a closed-ended fund. They assess assets’ cashflow and advise one which deals are suitable,” he says.
The changing definition of infrastructure?
Innovation leads to new products being brought to market, but the industry must be mindful of maintaining the integrity of an asset class. Keeping the definition of said asset class very close to the original meaning, rather than broadening it out for the sake of product creation is critical here.
Von Scheven notes: “In some parts of the market, the definition of infrastructure has gotten got very creative, but we always stick close to our clear, specific definition of it.”
While Wicki at SFP says: “The big question is what is infrastructure and what is not infrastructure? This definition appears to be expanding over time. But infrastructure should remain an asset class on its own; it shouldn’t get diluted.”
Both highlight that infrastructure funds must include hard assets, with predictable cashflows. Service companies, theme parks, alternative farming – some might try to define these as infrastructure but in reality, they don’t fit the bill.
In an article, Richard Parker, head of EMEA infrastructure at Barings, outlines: “The market increasingly includes assets labelled as ‘infrastructure’ that seldom exhibit the sector’s characteristics.”
He goes on to explain that Barings avoids “areas where that definition stretches into assets with material commodity price exposure, unproven or unmitigated volume risk, or other uncertainties that undermine the predictability”.
Room to grow
While there may be a debate over what assets should qualify for an evergreen infrastructure fund, investor demand is set to grow. “Only a very small percentage of the private wealth channel has exposure to infrastructure today,” says von Scheven. He sees high net worth investors putting pressure on their private bankers for allocations to infrastructure, however there is still some education needed as he says: “Some of the bankers don’t yet know the asset class very well.”
Market data suggests the shift may already be underway, even if it is not being felt universally yet. Adams Street’s 2026 adviser outlook finds almost eight in ten financial advisers already allocate at least 5% of client assets to alternatives, with around 70% expecting a greater share of their clients to gain some level of private markets allocation over the next three years.
However, successful evergreen infrastructure funds will rely on credible managers and a strict portfolio construction process. Some also argue that keeping retail and institutional money separate through different fund structures will be important to ensure that mismatches in liquidity needs and sophistication do not compromise outcomes for both types of investors.
The importance of the operational dimension of these funds will be explored in the next article in this series. The way asset managers handle this will determine whether evergreen infrastructure continues to build trust among institutional and retail investors, or whether it becomes a cautionary tale for the asset class.
Angele Spiteri Paris is a senior research consultant at CoreData Group, a global specialist financial services research and strategy consultancy. To find out more about our industry insights and research programmes, you can reach her at [email protected]