Infrastructure Investment Surges as AI and Energy Demand Reshape Markets
- Editor
- Jun 30
- 2 min read
Updated: Jul 1
What's New
According to Hamilton Lane's Infrastructure Market Overview 2025, global infrastructure transaction volume reached $1.16 trillion in 2024, with artificial intelligence driving unprecedented demand for data centers and power generation assets. Infrastructure now represents 6% of private markets allocation, up from just 1% in 1999, as institutional investors pivot toward essential services and energy transition opportunities.
Why It Matters
The convergence of AI computing demands, aging infrastructure, and climate transition is creating a once-in-a-generation investment opportunity. With U.S. data center electricity consumption expected to reach 6.7-12% of total power by 2028 and infrastructure secondary markets growing to $20 billion annually, private capital is becoming essential for modernizing critical systems that governments can no longer fund alone.
Big Picture Drivers
AI Revolution: Data center demand tripling from 2014-2024, requiring massive power infrastructure investments to support computing growth
Energy Transition: Renewable capacity additions driving need for grid modernization and backup power solutions
Funding Gap: Government infrastructure spending falling $91 billion short annually in the U.S. alone, creating private investment opportunities
Supply Constraints: Limited new infrastructure supply meeting surging demand, particularly in data centers and power generation
Policy Support: Trump administration's $500 billion Project Stargate and continued renewable tax credits sustaining investment momentum
By The Numbers
$1.16 trillion: Global infrastructure transaction volume in 2024
2,425: Total number of infrastructure deals completed in 2024
31 months: Average fundraising timeline, up from 21-month historical average
95%: Percentage of deals under $2.5 billion, showing mid-market opportunities
176 TWh: U.S. data center electricity consumption in 2023, representing 4.4% of total usage
Key Trends to Watch
Data center developers are increasingly seeking behind-the-meter power solutions and direct energy generation partnerships to overcome grid constraints.
Infrastructure secondary markets are expanding rapidly as asset realizations slow, creating liquidity opportunities at attractive discounts.
Small-to-mid market infrastructure assets continue offering better entry valuations than large-cap deals, with 16% lower transaction multiples.
Co-investment opportunities have increased 5x since 2020 as slower fundraising creates capital gaps for sponsors seeking deal completion.
The Wrap
Infrastructure investing is experiencing a fundamental shift from defensive utility-like returns to growth-oriented opportunities driven by technological transformation. Smart investors are focusing on SMID-market deals, secondary opportunities, and assets benefiting from AI-driven demand while avoiding overvalued mega-cap transactions. The sector's evolution from 1% to 6% of private markets suggests this reallocation is just beginning.
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