Demand for investment in European infrastructure is climbing. At the time of writing (October 30), overall European M&A infrastructure deal value had reached US$144.8 billion, well ahead of full-year totals for 2023 and 2024.
Given the growth in dealmaking and the opportunities on offer in a variety of different verticals, Europe’s infrastructure market presents the private sector, and private infrastructure managers in particular, with a highly attractive set of growth fundamentals to invest in.
Infrastructure assets, which are characterized by inflation-linked, contracted revenue streams, have always been a strong fit for investors seeking yield. The sector also demonstrates low correlation with traditional equity and fixed-income markets, reducing overall portfolio risk, as well as allowing investors to capture additional returns through illiquidity and complexity premiums. Meanwhile, active management and operational improvements provide further upside potential.
According to the MSCI Private Infrastructure Index, which tracks more than 500 privately owned infrastructure companies with a combined equity value of more than US$223 billion, private infrastructure assets have delivered rolling one-year total returns of 11.5 percent. Over a ten-year investment horizon, annualized total returns for private infrastructure are running at 12.5 percent, beating public equities, global bonds and listed infrastructure.
In addition, digital “revolution” linked to AI and energy transition has broadened the European infrastructure opportunity set for investors and dealmakers, with strong demand laying a favorable foundation for investment in data centers, towers, fiber-optic networks and 5G capacity.
These characteristics make this a compelling period for private infrastructure managers to back deals involving high-quality assets that have the potential to produce attractive risk-adjusted returns.
Indeed, European infrastructure is offering investors more than defensive, income-focused exposure. It represents a compelling growth opportunity driven by structural transformation and robust institutional demand.
European investor attraction
Private infrastructure managers are moving quickly to take advantage of these tailwinds.
Europe-focused infrastructure fundraising has been buoyant, underscoring the robust investor appetite for exposure to these assets. According to Pitchbook research, fundraising for European infrastructure in 2025 was running at close to €40 billion (US$46 billion) by June 2025. This figure already represented 63 percent of the full-year total posted in 2021, a bumper year for fundraising across all private markets asset classes.
Fundraising in 2025 has been boosted by jumbo closes, including EQT closing its Infrastructure VI fund on €21.5 billion (US$25 billion), Copenhagen Infrastructure Partners securing €13 billion (US$15 billion) for its fifth flagship fund and Ardian raising US$20 billion for a fund focused on energy, transport and digitalization in Europe. More than 80 percent of commitments to infrastructure funds have gone to Europe this year, and Preqin forecasts that growth of European private infrastructure assets under management will exceed the North American market by 2030.
The steady flow of capital has been partly driven by investors diversifying US exposure in a period of domestic tariff and policy flux, but also by the underlying appeal of the European infrastructure investment case.
AXA Investment Managers notes that while the North America and European infrastructure investment markets are approximately the same size, North America has consistently raised two-thirds more infrastructure capital than Europe has. For now, Europe presents an attractive alternative to the US simply because there is less outright competition in an addressable market of similar size.
Indeed, US-based companies and private markets funds have been active players in European infrastructure M&A. Stateside investors such as EIG led a £1 billion (US$1.3 billion) capital raise for UK battery storage company Fidra Energy, while KKR Global Infrastructure invested €2.9 billion (US$3.4 billion) for a minority stake in biofuel and energy storage company Enilive, from Italian supermajor Eni.
According to Preqin, institutional investors are also taking note and planning to increase their European infrastructure allocations by 5-7 percent in 2026, with Europe now commanding the largest share of global infrastructure deal activity.
Data centers, digital infra and renewables drive deals
Another differentiator for the European infrastructure deal market is that a larger share of European deal flow comes from the faster-growing subsectors of digital infrastructure and renewable energy than is the case in the US.
And the pressure on Europe’s electricity grid is particularly acute, as the increasing demand from data centers pushes existing power generation capacity to the limit.
Dealmakers have been eager to follow the momentum. Ardian, for example, has backed a deal valuing France-based solar energy group Akuo Energy at as much as €2.3 billion (US$2.7 billion), while Interogo Holding and Arjun Infrastructure Partners bought up stakes in European data center business Data4 in a €2.2 billion (US$2.6 billion) deal.
These subsectors should continue animating infrastructure deal markets, as policymakers lean into renewables to improve energy security and deliver on decarbonization objectives, while data center and digitalization investment show no signs of slowing down as demand for generative AI computing power skyrockets.
These fast-moving markets will spur investment in infrastructure in other segments, most notably power generation, where more investment in capacity will be necessary to supply ever-expanding data center facilities, with McKinsey forecasting that data center power demand will be three times 2024 levels by 2030.
Innovation and sophistication in deal structuring
Private infrastructure managers are deploying a variety of innovative, collaborative and flexible deal structures to take advantage of the positive European infrastructure investment case, while also mitigating the risks of still-elevated interest rates, constrained debt capital markets and increasingly complex operational demands.
Club deals between sponsors and joint ventures with pension plans, insurers and sovereign wealth funds with a low range cost of capital have become more commonplace and have proved an effective method of spreading out capital commitments and sharing long-term risk.
These types of deals have proven particularly popular for funding digital infrastructure projects, including fiber networks, telecom towers and data centers. KKR and Global Infrastructure Partners, for example, participated in a joint venture with Vodafone to back Vantage Towers in a €16 billion (US$18.4 billion) deal. The JV sees Vodafone retain strategic oversight of the asset, while KKR and Global Infrastructure Partners provide capital expansion and manage leverage.
KKR also led a consortium alongside the Italian government and Canadian institutional investors to acquire TIM Group’s (formerly Telecom Italia) fixed-line network FiberCop in an €18.8 billion (US$21.7 billion) deal.
The FiberCop deal also highlights how public-private partnerships and state co-investment deals are being deployed in the infrastructure space. In highly regulated, politically sensitive infrastructure subsectors, collaborating with the state and public sector provides licensing stability and supports long-term concession arrangements.
In France, meanwhile, the national initiative to roll out high speed broadband—the Plan France Très Haut Débit—has secured more than €22 billion (US$25 billion) of investment in broadband infrastructure by providing investors with policy clarity from public authorities and the broadband and communications regulator Arcep.
Carve-out and minority transactions, such as the Vantage Towers deal and Blackstone’s investment in French telecom group Sipartech, have been another effective way to navigate regulatory hurdles, while also allowing vendors to retain operational control of strategically important assets.
These deals can combine a number of features, ranging from long-term leasebacks or offtake deals to governance protections, downside protection covenants, deferred considerations and put/call options or tag-along rights that provide vendors with the necessary comforts around operations and governance rights.
Financing flexibility
Deal financing arrangements have also evolved, with dealmakers willing to make higher equity contributions and limit leverage to get deals over the line. Earn-outs, deferred pricing tools and partial exits, meanwhile, have helped to narrow valuation gaps and share risk between buyers and sellers, while co-investment and continuation vehicle deals have effectively extended hold periods and facilitated larger equity checks.
Deal structuring and financing creativity, combined with large pools of dry powder, place private infrastructure managers in a strong position to drive the next phase of infrastructure deployment across Europe.
Core challenges
The European infrastructure market is not without its challenges, though. Investors will need to navigate regulatory differences across the region, a prime example being the decision of some European governments to put moratoria on new data center connections and data center planning applications. Investing in fiber networks in France is not the same as investing in towers in Germany or in data centers in the UK.
Infrastructure is also capital intensive, and with interest rates still elevated, construction financing costs remain high.
Core infrastructure maintenance and new project developments require large amounts of capital expenditure. Investors and dealmakers must proceed with prudence to avoid deploying large sums of cash into long-term projects at a time when asset valuations and cost of capital remain difficult to forecast.
Moreover, tighter credit conditions are affecting the availability and terms of acquisition debt, especially for multibillion-euro transactions. This heterogeneity requires investors to adopt highly tailored approaches in both asset selection and deal structuring, often combining pan-European investment theses with local execution expertise.
However, the macro backdrop is improving. Inflation is easing, central banks in the UK and Europe have begun cutting rates, and financing conditions are becoming more predictable. This could help increase flows of long-term capital into underserved core segments, which can complement the momentum in digital and renewable infrastructure. This could revive M&A activity in core infrastructure, alongside growth sectors like data centers and renewables.
A positive outlook
The long-term outlook for European infrastructure is exceptionally robust. The continent faces structural needs in areas such as energy transition, digital connectivity, urban mobility and social infrastructure. And these are not optional: They are driven by EU climate targets, aging infrastructure and the exponential rise in data consumption and computing power.
In this context, the European project pipeline is not only intact but expanding, and private capital stands ready to help finance it.
