[Edaily Marketin, Reporter YunJi Kim ] Large sums of money are pouring into infrastructure funds in the global alternative investment market. This surge in demand for capital in the infrastructure market is driven by a combination of rising demand for electricity and data centers due to the spread of artificial intelligence (AI) and increased investment in facilities to support the energy transition.

As funds from long-term investors, such as pension funds and insurance companies, flow in, global asset managers are also accelerating the formation of large-scale funds one after another.

According to the global investment banking (IB) industry on the 12th, major asset managers such as Brookfield, Cube Infrastructure, and Allianz Global Investors have been achieving successive successes in raising capital for infrastructure funds over the past month.

Capital is flowing not only into large-scale funds worth tens of billions of dollars but also into funds investing in mid-sized European infrastructure companies and loan funds that provide financing for infrastructure projects, leading to greater diversity in investment targets and methods.

The firm that has secured the largest amount of capital is Brookfield, a global alternative investment manager. Brookfield recently secured $26 billion (approximately 34.5488 trillion won) for its Global Infrastructure Fund No. 6 and is approaching its first closing. Having previously invested in a variety of infrastructure assets—including power generation facilities, transmission and distribution networks, and transportation and telecommunications infrastructure—Brookfield plans to focus its investments once again on large-scale core infrastructure projects.

In contrast to Brookfield, which invests in large-scale core infrastructure, asset managers targeting Europe’s mid-market infrastructure sector are also accelerating their fundraising efforts. Cube Infrastructure, a European infrastructure specialist, recently raised 587 million euros (approximately 864.3 billion won) in the first fundraising round for its Fund No. 4.

Cube Infrastructure, which has invested in European infrastructure closely tied to daily life—such as renewable energy, telecommunications networks, and public transportation—plans to continue investing in mid-sized companies, with a focus on energy transition and digital infrastructure.

As demand for infrastructure investment grows, funds are also flowing into related loan funds. Allianz Global Investors recently raised its second infrastructure loan fund to 1.5 billion euros (approximately 2.2078 trillion won), 50% more than its initial target.

The fund operates by providing loans—primarily in Europe—for renewable energy, digital infrastructure, transportation, and social infrastructure, and earning interest on those loans. It combines senior and subordinated loans based on the repayment priority of companies or projects, and has already secured commitments to invest approximately 1 billion euros (about 1.4731 trillion won), equivalent to two-thirds of the target amount.

The surge in investment demand for infrastructure played a significant role in attracting capital to this fund. This is driven by the accelerating expansion of data centers and power grids due to the proliferation of AI, compounded by the need to deploy renewable energy and replace aging infrastructure. The reality is that these projects involve high initial investment costs and long payback periods, making them too burdensome for governments or individual companies to handle alone.

Fortunately, this massive demand for capital aligns with the investment needs of institutional investors seeking stable cash flows. While roads, power generation facilities, and telecommunications networks require substantial initial investment, once they enter the operational phase, they can generate relatively steady returns through user fees or long-term supply contracts.

Furthermore, pension funds and insurance companies can diversify their investment portfolios—which are currently concentrated in stocks and bonds—by investing in infrastructure. This is why they are increasing their allocation to infrastructure investments.

As more capital flows into infrastructure funds, competition among asset managers to secure high-quality investment opportunities is expected to intensify. In particular, if investment demand concentrates on high-growth assets such as data centers and power grids, acquisition prices may rise, making it difficult to secure expected rates of return.

For asset managers, the challenge moving forward will be to secure profitability by investing at appropriate prices while drawing on ample dry powder.

An official from the European private equity (PEF) industry stated, “The key to infrastructure investment is securing favorable terms,” adding, “When asset managers compete for the same assets, acquisition prices inevitably rise, so securing actual returns will become more important than the size of the investment.”