In every industry, technology is a potentially disruptive or return-enhancing force, and infrastructure is no different.<\/p>\n
From revolutionizing how infrastructure assets are designed and constructed to improving how they\u2019re operated and maintained, technology will transform the asset class. To stay apace and optimize portfolio construction, investors must anticipate how technology can affect the assets in their portfolios.<\/p>\n
Historically, infrastructure companies have operated in a relatively stable and predictable technology environment. However, recent technological advancements have shifted this reality, affecting how and where infrastructure is used, and which assets stand to lose or gain value. Artificial intelligence is likely to accelerate these changes.<\/p>\n
Technological innovation also makes asset life cycles less predictable. Investors may now need to better understand technology and consider that it could make some assets obsolete\u2014if they are not effectively managed. Alternatively, what is considered value-add today may one day be considered core.<\/p>\n
Many infrastructure investors have already broadened their target investments beyond traditional core infrastructure\u2014notably, value-add infrastructure that is increasingly revolved around technology-enabled assets or \u201cinfratech.\u201d To capitalize on these opportunities and create more sustainable business plans, we believe investors should consider working with partners that can help them step outside their comfort zones to underwrite technology\u2019s effect on infrastructure assets.<\/p>\n
Over the years, we\u2019ve partnered with some of the infrastructure investors at the forefront of this change, deploying capital in a variety of sectors that are being redefined by technology. This paper distills these experiences and the forces at work to demonstrate that as an asset class, infrastructure can be on the leading edge. In each instance we explore the technological catalysts and the change they are bringing about.<\/p>\n
Much of the opportunity set today in infrastructure entails either deploying capital toward new greenfield projects or modernizing existing brownfield infrastructure. In either case, technology is fundamentally changing each phase of project development and disrupting the way that infrastructure ecosystems have traditionally functioned.<\/p>\n\n\n