How Is Infrastructure Debt Building the Modern World?

The infrastructure that powers the modern world is being rebuilt at unprecedented scale, and the cost is staggering. 

McKinsey projects that $106 trillion will be required by 2040 to modernize aging infrastructure and build the assets the global economy needs: the power grids and water networks, ports and airports, and fiber and data centers connecting the world. Government balance sheets, already stretched, likely won’t be able to bear the weight alone. 

Commercial banks accounted for more than 90% of infrastructure financing before the Global Financial Crisis began a structural handoff to private capital. By the first half of 2025, according to IJGlobal, non-bank lenders were providing 53% of the world's private infrastructure debt, signaling a reordering of who is financing the physical and digital backbone of the modern economy.

Today, the energy transition and the digital infrastructure buildout are reshaping the infrastructure asset class. In 2025 alone, more than 80 infrastructure funds raised over $200 billion, according to IJGlobal. 

An asset class once on the margins is now at the center of institutional credit. For investors, this can present an opportunity. The question is: Who captures it?

Infrastructure isn’t what it used to be. What once primarily meant roads, bridges and power lines now stretches across data centers, fiber networks and the energy transition infrastructure. As the category expands, defining it has become harder — and more important.

Infrastructure, says Patrick Manseau, Head of Infrastructure Debt for the Americas and Asia Pacific at MetLife Investment Management, is “a physical asset or system that provides essential services to the public or the economy, with limited competition or high barriers to entry.”

The definition can get stretched, Manseau says, when companies adjacent to real infrastructure claim the label. “The airport is the infrastructure,” he says, “not the corporate baggage handling company, or the cart provider for luggage at the airport.”

The potential appeal for investors is structural. Backed by long-lived assets and cash flows from essential services, infrastructure debt has historically performed better than corporate credit of the same rating. Four decades of Moody’s data¹ shows that infrastructure debt has defaulted less often, with the gap widening the longer investors hold.²

Private infrastructure debt has also typically paid more than public high-yield bonds of comparable rating.³ That, alongside the potential of lower credit risk, structural protections and diversification from corporate cycles, is what’s drawn institutional capital into the asset class.

However, no asset class is free of risk. Private infrastructure debt is illiquid, with no readily tradable market. Projects carry legal and regulatory exposures, operating and technology risks, and the possibility that a portfolio takes shape differently than an investor anticipated.

As capital floods into newer corners of the asset class — notably, the AI-driven power and data center buildout — the discipline of distinguishing reliable cash flows from speculative ones becomes the work that determines the return.

Manseau points to the shale gas revolution, which crashed merchant power prices — the rates electricity sells for on the open market — for more than a decade. Projects that had been underwritten on optimistic price forecasts got restructured. He sees the same risk in the AI-driven power buildout now.

“In any power deal with merchant energy, the one thing you know is wrong is the assumed price,” Manseau says. “It might be wrong on the upside or the downside. Nobody knows what's coming. The discipline is structuring the deal so it doesn’t matter.”

As private capital funds more of the world’s infrastructure, the opportunity set continues to expand. Capturing it requires deep origination access, the underwriting depth to evaluate long-lived physical assets, and the structural discipline to navigate covenants, collateral and risk across cycles.

MetLife Investment Management has been taking that approach for decades, managing $41.2 billion across more than 500 credits, and directly originating more than a third of its deals over the past five years.⁴ As both a balance sheet investor for MetLife and a fiduciary for third-party clients, MIM combines fundamental asset-level analysis with infrastructure expertise, global reach and an extensive origination network — sourcing, evaluating and structuring transactions designed to deliver stable, risk-adjusted returns.

“Principal preservation is the first thing,” Manseau says. “Five basis points isn't going to make a difference at the end of the day. We’re looking for high-quality credits.”

In a market where capital is abundant, investor discipline and scale are the edge.

¹ Past performance is no guarantee of future results.