Disclaimer: Views in this blog do not promote, and are not directly connected to any L&G product or service. Views are from a range of L&G investment professionals, may be specific to an author’s particular investment region or desk, and do not necessarily reflect the views of L&G. For investment professionals only.
Tomorrow’s world: The digital infrastructure opportunity
Forecasted growth for cloud computing, AI and data processing has created an increasing need to support digital infrastructure assets and, in our view, a substantial opportunity for investors.
The phenomenal growth of the digital sector is structural, reflecting that our society and economy are evolving. Today, the computation, transfer and storage of data is essential and the infrastructure facilitating this is fundamental.
The digital connectivity underpinning so many of our everyday activities would simply not be possible without fibre networks, transmission towers and data centres. Key societal goals – from increased financial inclusion to creating a more environmentally sustainable world – will also need to be facilitated by increased investment in digital infrastructure.
Investors are also increasingly seeing opportunities to support digital infrastructure. Today, deals involving these assets account for roughly 21% of the total infrastructure sector[1]. That compares with just 10% of deals focusing on digital infrastructure five years ago.
In our view, the space could offer investors the attractive combination of return potential and societal impact. We see three overarching trends converging, which should continue to bolster the case for investors seeking out these assets.
Read more on the opportunity in digital infrastructure here.
[1] Source: Preqin as of Q1 2024
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