The capital structure is a load the asset must carry The deepest point running through these investor perspectives is not about demand. It is about leverage. A sound asset can become a failed investment if its financing assumes immediate utilisation, perfect delivery and uninterrupted revenue growth. Interest must be paid on specific dates whether or not demand has arrived. A phased programme changes when capital is committed; modularity reduces the amount invested before demand is proven. In that sense, the Gantt chart is also a credit decision. Macquarie's 2026 infrastructure outlook projects private infrastructure returns of approximately 9 to 10 percent annually over the coming decade, with income, earnings growth and operational improvement doing more of the work than rising multiples.³ Returns will increasingly need to be earned within the asset itself, which brings design much closer to the source of investment performance. Resilience without gold-plating This matters most in import dependent energy markets. Long-duration capital can spread the cost of essential infrastructure across the decades in which it is used, but capital alone does not create affordability. Well designed resilience, storage, flexibility, modularity, alternative conversion pathways protect supply and reduces whole- system cost over time. Poorly designed resilience is gold plating passed on to customers. Engineering judgement, applied early, is what separates one from the other.
In that environment, the substation may be as strategically important as the project it connects. A permitted corridor, water right or durable community licence may be worth more than developers assume. These have traditionally been treated as inputs to be secured before the “real” asset is built. Increasingly, the input may itself be the asset. Time has acquired a price A technically superior asset delivered in seven years may create less value than a good asset operating in three. Every additional month before operation increases financing costs and creates another opportunity for policy, technology or demand to change. Standardisation, staged capacity, simpler permitting and early community engagement determine when capital is drawn and whether the project reaches operation at all. A tender process may reward the lowest stated capital cost; an investment committee must also weigh certainty, speed and deliverability. Good design has to reconcile the two. The cheapest asset on paper is not necessarily the most valuable asset in practice. 9-10 percent but earned inside the asset, not off rising multiples
10% Percent annual return
0%
100%
– Private infrastructure returns – Drivers - income – Earnings growth – Operational improvement
Design enters the investment committee
The investors shaping this cycle are consistent about what it will favour: infrastructure that removes genuine bottlenecks, reaches operation with certainty, remains useful when forecasts change and carries its financing through volatility. Those qualities are decided at the drawing board, in the configuration of the asset, the sequencing of delivery, the capital committed before demand is proven and a future that the design leaves open. Value is not created only after capital has been committed. It is designed into the asset that capital chooses to fund.
Source: Macquarie Asset Management, Outlook 2026.
For much of the past decade, investors asked which businesses could scale without owning physical assets. The question has been inverted: which of the world's defining ambitions can scale without rebuilding the physical world? Artificial intelligence, electrification, energy security, industrial decarbonisation and supply-chain resilience all depend on infrastructure. But capital will not reward every project equally.
References 1. Brookfield, 2026 Investment Outlook: Infrastructure, Accelerating Growth, Embedded Resilience, December 2025. 2. Bain & Company, Dry Powder podcast, “Mastering the Infrastructure Cycle with Stonepeak's Michael Dorrell,” March 2026. https://www.bain.com/insights/mastering-the-infrastructure-cycle-with- stonespeaks-michael-dorrell-podcast/
3. Macquarie Asset Management, Outlook 2026: Infrastructure; and Pathways: Private Infrastructure Performance, Uncovering the Source of Returns. https://www.macquarie.com/au/en/about/company/macquarie-asset- management/financial-advisor/insights/outlooks/2026/infrastructure.html
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