Essential networks: The infrastructure investment case for 2026

Viewpoint

• We approach 2026 with investment optimism.  Macro conditions are such that growth risks persist but inflation remains sticky. An environment where infrastructure assets historically thrive
• The investment landscape is being driven by powerful secular trends, particularly decarbonisation and digitalisation, creating substantial growth opportunities across infrastructure sectors
• Listed infrastructure valuations appear fair on an absolute basis, attractive relative to broader equity markets, and compelling when compared to equivalent private market transactions
• We continue to favour monopolistic infrastructure assets with regulatory protections, strong contracts, and inflation linkages that deliver resilience through economic cycles

What happened in 2025?

2025 proved to be a year of continued investment in essential infrastructure networks globally. Electric utilities announced record capital expenditure plans to support both renewable energy integration and surging electricity demand from data centres. Meanwhile, the communication infrastructure sector navigated a year of valuation compression. Water utilities, particularly in the UK, began benefiting from improved regulatory frameworks that recognised years of underinvestment.

The macroeconomic environment remained complex, with central banks managing the delicate balance between supporting growth and containing persistent inflation. This backdrop reinforced the value proposition of infrastructure assets with their embedded inflation protection mechanisms and essential service characteristics.

Fund performance¹

The Maple-Brown Abbott Global Listed Infrastructure Fund (the Fund) delivered a net return for the year to date to 31 December 2025 of 14.3% versus what we call the reference index (FTSE Global Core Infrastructure 50/50 Index (AUD)) return of 6.3%. The Fund returned 12.4% p.a. for the three years to 31 December 2025, outperforming the reference index by 3.2% p.a. Since inception in December 2012, the Fund has returned 12.0% p.a. outperforming the reference index by 0.8% p.a. We believe this track record reflects the benefits of our active management style, valuation discipline, and tight definition of infrastructure when investing in global listed infrastructure through various market cycles.

Key stock performance and holdings in 2025²

Toll roads, UK regulated utilities, US electric utilities all contributed positively to the Fund’s year of outperformance.  Communication infrastructure, in particular cell-tower companies cost the Fund relative performance, however we remain committed to these holdings based on the original investment thesis. Toll road holdings, led by Ferrovial, continued to demonstrate growth and the defensive, inflation-linked characteristics of the asset class, with a 38% return in 2025 and strong toll increases on its flagship 407 ETR asset in Toronto reinforcing the sector’s resilience and growth potential. As share prices moved higher, the Fund reduced and rotated some positions, including adding toll road company Atlas Arteria to take advantage of its discount to our internal valuation.​

Within UK regulated infrastructure, Severn Trent  and United Utilities holdings increased as we expect them to benefit from Ofwat’s PR24 regulatory determination for the 2025–2030 period. For Severn Trent, the new framework is anticipated to support around 10% per annum growth in regulated asset value, underpinned by a step-up in allowed water sector expenditure from about £61 billion to £104 billion over the five years to 2030.

SSE Plc is a key player in the UK’s journey to net zero and the focus will be on the upgrade of the Scottish transmission network which will bring power from renewables down into England. SSE stock rallied over 25% late in 2025 as the market liked the upgraded growth guidance which centres on 25% regulated asset value (RAV) CAGR over the period to 2030

In US electric utilities, Entergy Corporation  was a standout performer in 2024–2025, returning 25% in 2025 after Meta announced at the end of 2024, a 4 million square foot data centre, its largest globally, within Entergy’s service territory, highlighting how utilities in certain regions can benefit from the data centre build-out. Stock selection within North American utilities added value for the Fund despite a modest underweight versus the reference index over the period.

Communication infrastructure remained a major allocation, with cell-towers representing around 15% of the Fund as at 31 December 2025. The sector faced pressure from more cautious growth expectations by the market, but valuations already look to reflect these headwinds and we believe the segment continues to offer robust, contracted earnings and long-term growth potential driven by digitalisation. Italian tower company INWIT declined -13% over the year after cutting its 2026-2030 guidance to the lower end of previously communicated ranges, citing ongoing difficult conditions in the Italian telecom market and lower-than-expected inflation. Spanish peer Cellnex also fell 10% during the year. This continues a challenging period for the cell-tower sector that worked against the Fund over 2025.

Fund positioning and outlook
Electric utilities: The growth story continues

Over 2025, the Fund’s stock picking in this large sector shone through.  Electric utilities represent our largest sector allocation at nearly 40% of the portfolio, reflecting our conviction in the sector’s growth trajectory. We are witnessing a fundamental shift in the growth profile of these companies, driven by two powerful forces.

First, the energy transition continues to require massive capital investment in renewable generation, energy storage, transmission networks, and grid modernisation. Second, and more recently, the explosive growth in data center development is creating strong electricity demand. U.S. regulated utilities that historically delivered 4–6% earnings growth are now positioned to achieve 6–8% growth over the next five years.

Following strong performance from utilities with significant exposure to data center demand, we have recently begun rotating into other high-quality regulated utilities that offer greater valuation upside while maintaining similar growth characteristics. This approach ensures we capture the sector’s growth potential whilst managing valuation risk.

The investment case extends beyond growth rates. These companies operate under regulatory frameworks that provide visibility on returns, benefit from constructive relationships with regulators who recognise the necessity of infrastructure investment, and serve growing demand from customers increasingly reliant on electricity for both traditional uses and new applications such as electric vehicles and industrial electrification.

While we anticipate some pockets of weakness if the AI theme fades, any impact should be muted given the protections stemming from regulation and long-term contracts with the data centers.

Water utilities: Quality assets at attractive valuations

Water utilities currently comprise approximately 12% of the portfolio, representing what we view as high quality infrastructure assets available at reasonable valuations. The UK water sector, in particular, presents compelling opportunities following regulatory clarity for the 2025-2030 period.

We are attracted to water utilities for several fundamental reasons. These companies face a very long-dated capital expenditure requirement driven by aging infrastructure and environmental standards. The projects are typically small in scale, reducing execution risk. Water services remain affordable relative to their critical importance, providing headroom for necessary rate increases. Perhaps most importantly, water utilities face virtually no substitution or stranded asset risk. Water delivery and treatment will remain essential services regardless of technological change.

UK water companies have now entered a five-year regulatory period with improved clarity and allowed returns, creating an extended period of low regulatory uncertainty. This stability, combined with attractive valuations relative to historical levels and the regulated asset value growth expected from substantial capital expenditure programs, makes the sector appealing for 2026.

Telecommunication Towers: Compelling Value in Critical Infrastructure

At nearly 15% of Fund allocation, telecommunication towers represent what we consider one of the most attractive valuation opportunities in our investment universe. Current valuations sit at historically cheap levels despite the sector’s critical role in modern communications infrastructure and strong fundamental drivers.

Data consumption continues to grow rapidly across all demographics and geographies. Terrestrial tower infrastructure is essential for delivering this connectivity, and these assets benefit from very high barriers to entry. It is simply not possible to simply build competing tower networks economically. The assets themselves are very long dated with minimal obsolescence risk.

Our portfolio includes both European and US tower companies. While the sector faced headwinds in 2024 and 2025 from the threat of rising long-term interest rates and leverage concerns, we believe these concerns are more than fully reflected in current valuations.  Especially with long rates range trading at present. The sector’s defensive contracted earnings, inflation protection through escalators, and long-term growth potential driven by ongoing digitalisation provide strong foundations for performance recovery in 2026.

Transportation infrastructure

Transport infrastructure comprises approximately 20% of the portfolio, including toll roads and transportation assets that benefit from traffic recovery, inflation-linked revenue mechanisms, and secular trends toward increased mobility. These assets provide defensive inflation-linked revenue streams while participating in economic normalisation.

Sector themes driving growth
Decarbonisation: The multi-decade investment wave

The transition to cleaner energy sources represents perhaps the largest infrastructure investment opportunity of our generation. Electric utilities are at the centre of this transformation, requiring investment in renewable generation, transmission networks to connect new energy sources, energy storage to manage intermittency, and grid modernisation to handle bi-directional power flows.

This investment wave is not discretionary or subject to short-term economic cycles. Regulatory mandates, corporate commitments, and energy security concerns ensure sustained capital deployment over decades. For investors, this translates into visible, long-duration growth in regulatory asset bases and earnings.

Digitalisation: From connectivity to computing

The digital economy continues to expand, creating insatiable demand for both connectivity and computing power. Telecommunication towers support the connectivity layer, enabling the mobile communications that modern life depends on. Electric utilities increasingly support the computing layer, providing the massive amounts of power required by data centers.

These trends are interconnected and reinforcing. As more economic activity moves online, demand grows for both communications infrastructure and the data centers that process information. As artificial intelligence applications proliferate, the power intensity of computing increases further. Infrastructure assets positioned to serve these needs benefit from strong, visible growth trajectories.

Water quality: Addressing decades of underinvestment

Water infrastructure in many developed markets requires substantial reinvestment to meet modern environmental standards and replace aging assets. Unlike discretionary capital projects, water quality investment is largely non-negotiable once regulatory requirements are established. This creates visible, long-term capital expenditure programs that drive regulatory asset base growth for water utilities.

Macroeconomic outlook and portfolio positioning

We approach 2026 expecting continued economic uncertainty with growth risks but persistent inflation pressures. This environment plays to infrastructure’s strengths: defensive characteristics provide downside protection if growth disappoints, while inflation linkages protect real returns if price pressures remain elevated.

Our focus remains on actively managing a portfolio of high quality infrastructure assets that deliver inflation linked cash flows and attractive risk-adjusted returns. We favour assets protected by regulation or strong contracts, with barriers to entry and exposure to long-term growth themes. From a valuation perspective, we continue to find the listed infrastructure universe offering fair value on an absolute basis, attractive value relative to broader equities, and compelling value compared to private market transactions for similar assets.

The substantial capital expenditure requirements across our portfolio companies – driven by energy transition, digitalisation, water quality, and transportation needs – provide visibility on growth that is largely independent of near-term economic cycles. This combination of defensive characteristics, inflation protection, and growth creates what we view as an attractive risk-reward proposition for 2026.

Parting thought

As we enter 2026, the short and long term investment opportunity in global listed infrastructure remains solid. The sector combines defensive essential service characteristics with exposure to secular growth themes that we expect to be long in duration. Valuations remain reasonable, particularly when compared to the private market valuations being paid for similar assets. Our focus remains on identifying and actively managing positions in the highest-quality infrastructure companies that are well-positioned to capitalise on the substantial long-term capital investment required to support the world’s infrastructure networks through the energy transition, digital transformation, and quality improvements necessary for modern economies.

1   All returns are net of fees. Past performance is not a reliable indicator of future return.
2   Companies mentioned are Illustrative only and not a recommendation to buy or sell any particular security.

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