Ashwin Gopwani
Welcome to our podcast series, Checking In, Looking Ahead. In today's episode, we're talking about real assets. In particular, we're discussing the outlooks for commercial real estate and infrastructure. My name is Ashwin Gopwani, Head of Retirement Solutions, and I'm joined today by Ryan Severino, Chief Economist and Head of Research for BGO, an asset manager focused on commercial real estate, and Gianluca Minella, Head of Research for InfraRed, an asset manager that focuses on infrastructure. Thanks for joining me. Ryan, I'll start with you. How would you characterize the current economic and political backdrop for commercial real estate?
Ryan Severino
What I would say is the environment is still pretty uncertain right now. We've gone through a period where real estate went through a significant pricing adjustment predominantly because of what happened to monetary policy around the world. And now we're really going through a period of significant uncertainty that generally associates with policy. A lot of it stemmed from changes to U.S. trade policy, which spilled over into changes in monetary policy, and then ultimately fiscal policy. And so, the backdrop is still relatively uncertain even though we are moving farther and farther away from the pandemic and high inflation and all of the things that negatively impacted real estate. We're now moving through this phase of uncertainty, and we just have to progress a little bit further away from some of these exogenous shocks that created the uncertainty throughout 2025.
Ashwin Gopwani
Thanks, Ryan. I'll ask you a similar question, Gianluca. How's infrastructure performed in the environment that Ryan pointed out, given uncertainty, monetary policy changes and corresponding changes in trade policy?
Gianluca Minella
So infrastructure did exactly in the last few years what it promised. Performance has been resilient at around 8%–9% (source: Preqin, November 2025) if we look at the market as a whole independently, whether we look at one-, three- or five-year performance of the asset class. And there is a reason behind that: namely the fact that this asset class is a defensive asset class that should more or less perform in a similar way across different macroeconomic environments. And as Ryan correctly described, we've gone through a lot. We have gone through a pandemic first that has led to a standstill in GDP fundamentally. Then we've gone through an inflation spike and an interest rate spike. All of these factors have not really impacted the infrastructure market as a whole. Nevertheless, what we had seen was a slight downturn in valuations because higher interest rates demanded higher return expectations for infrastructure assets. But it's really interesting to see that what the last few years and what last year have really demonstrated is that infrastructure is not only one asset class, but a collection of asset classes. Think utilities, transport, digital, energy: they all somehow provide diversification, not from other asset classes, but within each other. And that's exactly what we have seen last year: very strong performance from digital infrastructure and very strong performance from energy, and to some extent these two sectors are linked with each other as we know now. On the other hand, transportation has done recently decently well, but nothing exceptional. And actually, utilities has been an interesting sector in the context of this capex supercycle now, which is driven by the push for energy and digitalization. We've seen that actually the risk profile of utilities has changed a little bit, or that investors are looking at utilities in a slightly different way. So as a whole, we’ve seen very resilient performance within the different sectors we've seen, with a slight diversity in performance. But that's actually a good thing, that's what we wanted. Just to conclude, inflation has remained sticky, and that has really helped this asset class perform well because fundamentally we know that infrastructure is meant to recover during inflation and that's exactly what it has done.
Ashwin Gopwani
So, given those factors, given that inflation has been sticky and given the impact that interest rates have had and could continue to have on infrastructure as an asset class, what is your view for the next 12–24 months?
Gianluca Minella
We have actually just published our outlook for the year. Let me give you some very interesting data. If you look overall at fundraising within the alternatives space, infrastructure used to account for only 7%–8% of total fundraising. And surely in 2023 and 2024, if we look at these years, you know we were not dissimilar from that. The asset class suffered alongside fundraising for other alternatives; the effect of higher interest rates that we have just discussed and a lack of distributions of distributed to paid-in capital, a lack of exits. And surely, investors decided to take a break, but 2025 has defied any expectation. If you look at that number, 7%–8%, today it's around 15%. So, infrastructure as an asset class according to Preqin accounts for about 15% of total fundraising within alternatives (source: Preqin, November 2025). And we are just witnessing the highest fundraising in history for the asset class at around US$170 billion for 2025 year to date in November. Why? Well, we have discussed the defensive feature of this asset class, and we know that inflation may remain sticky. Interest rates may remain, at least on the long end of the curve, a little bit sticky as well. So, to some extent this remains an attractive asset class. But here is what has happened and what we think will be defining the next couple of years. The role of the asset class is changing in investors’ portfolios. It used to be a fixed income replacement focused on dividends, on defense. What we are seeing today is that many investors actually look at the asset class for return enhancement. Why? For a very simple reason: because the pipeline has never been more attractive. The megatrends – digitalization, energy transition, energy security, just to name a few – are really broadening the set of opportunities. And these opportunities, unlike the previous opportunities we saw if we concentrate on core infrastructure, really open up the opportunity to using infrastructure as a capital expansion tool. If we look at the next couple of years, we see that most capital is going to potentially flow into core plus or value add infrastructure. And what has changed is that 10 years ago this used to be an asset class focused on selection of assets, there was competition for assets. Today, the pipeline is much, much deeper. So, to some extent it's less about competition. But what we will see in 2026 is a strong emphasis on selecting opportunities that have these strong infrastructure characteristics that enable investors to acquire assets that do what the asset class promises: provide that ability to provide dividends, growth, and inflation linkage.
Ashwin Gopwani
Thanks, Gianluca. So, Ryan, I'm going to ask you a similar question. Thinking about the factors that you mentioned that influenced real estate's performance – the uncertainty, monetary policy and U.S. trade policy – what's your outlook for the next 12–24 months based on that?
Ryan Severino
So here's the good news. If we can silver lining this a little bit. Gianluca used an important word. He talked about “resilience” or “resilient” at least as an adjective. And I don't want to make it sound as if real estate has come through the last few years completely unscathed, but it has been a really resilient asset class. Income returns have held up incredibly well, market fundamentals – space-market fundamentals in terms of how the properties have performed – have held up well. It’s really been on the capital markets side where you’ve seen the impact of the asset class. So, here’s where I’m going to be glass-half-full and a little bit silver lining, is that we are starting to see improvements there because monetary policy around the world has predominantly shifted from tightening, to basically being static, to now loosening again. Even in the U.S., which is the largest commercial real estate market in the world, the U.S. Federal Reserve has clearly shifted into a more loosening stance. There are a couple exceptions around the world – the Bank of Japan, places like that – but as a whole, as we are moving to generally looser monetary policy. That's starting to grease the wheels a little bit for commercial real estate capital markets. I don't think in the next 12 months that will fix everything that ails the asset class, but you give it 12 months, 24 months, and we will be much farther along in this recovery process than we are today. I'm pretty optimistic about the future, both in terms of how I think market fundamentals will hold up – because I think the economy itself is resilient and should perform well – but I actually think the capital market side should also be in a better place. And I think that's a really powerful combination of factors for real estate returns when you have an expanding economy and strong fundamentals at the same time that central banks are loosening policy, because those things usually don't happen at the same time. Usually, central banks are cutting rates when the economy is weakening. They've been cutting rates because inflation has been decelerating. We haven't really seen an environment like that for real estate since the 1980s when you had resilient economic growth, decelerating inflation and central banks cutting rates. It's not a surprise that the 1980s are still the undisputed champion for returns in commercial real estate. So, I'm not holding my breath that we can replicate that. But that combination of factors has proven to be incredibly powerful, and I think we are almost certainly going to get some version of that over the next 12 to 24 to 36 months. And that's why I'm feeling glass-half-full about this, even with the prevailing uncertainty that that we still see.
Ashwin Gopwani
Let's stick with that glass-half-full approach there, Ryan. I'm kind of curious if you can tell us more specifically if there are certain places where you're seeing more opportunity? Does it differ based on diverging monetary policy, by geography, and what's driving that?
Ryan Severino
The good news is, because commercial real estate is such a broad, pervasive asset class, you find it literally everywhere in the world. There are some commonalities around the world. There are some major systematic changes that are going on in the global economy that that affect this. And there's always some local flavor that gets mixed in. So, just to give you a sense of that, you are seeing increased – pick your favorite word – resiliency, redundancy, in global supply chains. As a consequence of that you're seeing the property class that we call industrial, which is a little bit of a catch-all phrase – but it includes warehouses and includes manufacturing facilities – that has been incredibly resilient. It should continue to perform well because you're now actually seeing investment in places that you wouldn't have seen once upon a time. As these global supply chains are shifting, as they're becoming a little more resilient, you're seeing opportunities almost everywhere that you look in the world, in North America, in both the U.K. and continental Europe, and in the Asia–Pacific. Housing is structurally undersupplied almost everywhere in the world that you would want to have it, which maybe isn't the best thing objectively, but from an investment point of view, it makes a lot of sense that we just see demand growing much faster than supply can keep up with almost everywhere in the developed world. And that's a pretty significant commonality again: North America, Europe, Asia–Pacific. And then the last one that I'll just throw out there as a commonality is data centers. And I know that's all the rage these days and everybody is very interested in one way or another in what's going on with artificial intelligence and machine learning. But one way or another, you are seeing the world waking up to the idea that this is very likely to be a significant structural change in how the economy operates. The U.S. is, I think, clearly the leader in this space, but you're seeing significant investment going on now in Europe and Asia–Pacific. And so, I'd say those are sort of probably the three main common factors. Just to give you a sense that the world is a diverse place, offices are progressing at different speeds around the world. They're very tight office markets in a place like Asia versus Europe versus North America, where we still have a lot of people who are resistant to going back into an office. There's this nice combination of these consistent structural factors, but there's always the local flavor that you could throw in there, which makes this such an interesting asset class.
Ashwin Gopwani
Thanks, Ryan. And I was fairly certain that there was no way we could go through this podcast without bringing up AI and data centers. So, I appreciate you doing it so that I didn't have to. Gianluca, similar question: what's creating the opportunities that you see in infrastructure going forward, and could you comment on your views on data centers and AI?
Gianluca Minella
Absolutely. And first of all, I think Ryan couldn't be more correct by describing the environment as one where growth is resilient and short-term interest rates are coming down. And what this is creating is an exceptional opportunity for alternatives as a whole – real estate and infrastructure together – for one main reason: because we have heard that to some extent alternatives and infrastructure as well have suffered a little bit when you look at valuations in the last couple of years. We haven't seen the same on the listed equity markets. What we hear a lot about from our investors is the willingness to rotate from potentially highly priced listed equity markets into alternatives to capture growth. And as you heard, that growth is blurring when it comes to the opportunities between infrastructure and real estate private equity. These asset classes are to some extent starting to be looked at by investors in a different way. We heard about data centers, for example. The way I would describe the opportunity for infrastructure also stands for, to some extent, real estate private equity. Just think about the following: the opportunity on the energy transition side annually is at around US$4 trillion a year. The opportunity for digital infrastructure or the digital sector is around US$3.5 trillion a year (sources: Infralogic, Preqin, November 2025). This is about the size of the German and Japanese economy together, their annual GDP. This gives you a sense of what is happening in the global economy and how well infrastructure is positioned within this environment to capture some growth above what the macroeconomic environment is suggesting will happen with GDP. And here is the opportunity. Just to select some examples, on the energy transition side we are seeing now that electrification has really become a trend, which is unstoppable independently from policy changes in the U.S. on renewables. Electrons are now becoming increasingly greener and more electrons, more electricity are needed, partially because of the overlap with demand from digital. But we have seen another huge megatrend within energy transition, which is now energy security. Shifting geopolitical patterns are pushing North America and also Europe to produce more energy, to be more independent. And that's a golden opportunity for infrastructure investors. Electrification is a very interesting one because what we are expecting to see is now an acceleration beyond energy into transportation. So, we have gone through a few years where electrification of transport had yet to become mature, but now as battery storage has really commoditized as a sector, we really expect a wave of opportunities in the “greenification,” the electrification of transportation, of commercial fleets and industrial fleets, not only personal vehicles. Digital – that's a huge opportunity as you described. Why? Because independently from AI – and I will later give you perhaps a very brief view on AI –the push for more use of data, migration to the cloud, is continuing. And these trends are requiring more ability to process and store data, not only in hyperscalers (public clouds, mega hubs) but also in edge data centers that are very close to the end user because you need low latency. Think about autonomous driving. Think about the financial sector that requires low latency by regulation, and how this is driving a demand for more localized data centers across different regions, not only North America but Europe, because of what we call “digital sovereignty.” So that's another huge topic. But independently from AI and the growth that we see there, there is growth and that growth is a trend that is unstoppable. And finally, just a word around deglobalization. We are witnessing the rise of trade barriers, a path toward the deglobalization. Ryan referred to it: we have now seen a spike in new infrastructure demands in mature markets, which is driven by the reshoring of production capacity, reshoring of all sorts of things that were externalized before. So, there is a big opportunity here to expand and build the infrastructure that is required. Overall, we see these megatrends as a big opportunity for return enhancement and to really enable investors to benefit from growth in infrastructure.
Ashwin Gopwani
Thanks Gianluca. Ryan and Gianluca, I found this extremely helpful, and I believe our listeners will as well. And you know I guess one of the key themes I definitely heard over and over was growth and resilience. And I'm sure that you know in a world of uncertainty that kind of tells you why these asset classes are continuing to gain interest from investors. So, thank you very much for attending.
Gianluca Minella
Thank you, Ashwin.
Ryan Severino
Thank you very much.
Ashwin Gopwani
That's all the time we have for this episode of Checking In, Looking Ahead. For more information, visit slcmanagement.com. Thanks for listening and have a great day.
Sources: Bloomberg, Macrobond, Preqin, Infralogic, Infrastructure Investor, CoStar, RCA, 2025–6. Content was recorded on December 12, 2025, and reflects views of the participants as of that date. SLC Management terms “expert” and “expertise” based on the level of comprehensive knowledge possessed by SLC Management investment specialists in a given sector of the infrastructure, private credit and/or real estate market.
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