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1、Infrastructure Investment Outlook 2023EXPANDING HORIZONS OF INFRASTRUCTURE INVESTMENTS LONDON/GREAT BRITAIN2Infrastructure Investment Outlook 2023Roland Bergernfrastructure investments experienced accelerated growth over the last decade and peaked in 2021 as the pandemic reinforced the resilience of
2、 infrastructure assets.New trends emerge within the infrastructure investment world every year,extending the boundaries of the investment landscape,and we observe two prominent trends:Firstly,investors are increasingly exploring opportunities based on themes rather than along sector lines.Investment
3、 themes such as energy transition,transport decarbonisation,waste,and circular economy have brought new asset types into the infrastructure fold and are driving collaboration across sector teams within the same fund.In 2018 it was challenging to include EV charging assets as infrastructure assets;ho
4、wever,that is no longer the case in 2023.These themes are also influencing the assessment of traditional infrastructure assets for example,EV charging installations at car parks and forecourts are driving major changes in investment considerations and valuation.Secondly,hybrid infrastructure investm
5、ents are broadening the infrastructure universe.These are situations where the target company does not always fulfil the full set of infrastructure criteria and/or where infrastructure funds are purchasing from or competing with private equity funds for ownership.Consequently,private equity funds ar
6、e now looking at their portfolio companies from an“infra-exit”lens and trying to de-risk the cash flows of those where they see this opportunity.In this report we start at a macro level,dissecting the broader investment and fundraising trends,before moving to sector-level analysis,where we address k
7、ey frontier topics by sector.MANAGEMENT SUMMARYICover photo Igor Kutyaev/iStock3Infrastructure Investment Outlook 2023Roland BergerFAST FACTS&CONTENTS 4 8 12 301/INFRASTRUCTURE M&A DEVELOPMENT AND FUNDRAISING2/CURRENT SENTIMENT AND OUTLOOK FOR 20233/SECTOR OUTLOOK AND ANALYSIS 3.1 Energy 3.2 Utiliti
8、es(including Waste management)3.3 Transport 3.4 Digital infrastructure 3.5 Healthcare 3.6 Education 3.7 Hybrid infrastructure CONCLUSIONIncreased focus on value creation expected pre-and post-acquisition2 opposing forces to be navigated by infrastructure investors4Infrastructure Investment Outlook 2
9、023Roland BergerInfrastructure M&A development and fundraising1/Infrastructure M&A set records in 2021,with total deal value reaching USD 542 billion.2022 started on a strong footing,but global macroeconomic headwinds resulting from the Russia-Ukraine war led to a slowdown for the remainder of the y
10、ear,which ended on USD 412 billion in total deal value a 24%decline over 2021.Despite the decline in deal value,deal count remained resilient and ended up 1%above 2021 level.This contrasts with the M&A activity led by private equity,where deal count declined as much as deal value.AEurope and North A
11、merica accounted for over two-thirds of global infrastructure deal count and value over the last decade.Their share has broadly remained the same,except in 2018 and 2019 when a few mega deals skewed the picture in terms of deal value.The decline in deal value in 2022(over 2021)was least pronounced i
12、n North America(-16%),but in all other regions deal value declined by over 20%.B A/Global infrastructure deal count and valueInfrastructure Investment Outlook 20234Roland BergerSource:Preqin,Roland Berger3,46230211159Average deal size USD mDeal count#Deal value USD bn2823294145
13、33200020202120222,3602,7912,8883,4012,9182,8682,4612,5712,5895Infrastructure Investment Outlook 2023Roland BergerInfrastructure Investment Outlook 20235Roland BergerSource:Preqin,Roland BergerC/Infrastructure deal count and value by sectorInfrastructure de
14、al count#Infrastructure deal value USD bn Source:Preqin,Roland BergerB/Infrastructure deal count and value by geographyEuropeNorth AmericaAsia-PacificRest of worldInfrastructure deal count#Infrastructure deal value USD bn 2014 2015 2016 2017 2018 2019 2020 2021 20222014 2015 2016 2017 2018 2019 2020
15、 2021 2022201320132,7912,8883,4013,4622,9182,8682,4612,5712,589329449332,3602,7912,8883,4013,4622,9182,8682,4612,5712,589329449332,360Across sectors,Energy has been most dominant over the last decade in terms of both deal count and value.Unsurprisingly,eve
16、n in terms of deal value,Energy infrastructure M&A remained resilient in 2022.The share of Digital infrastructure has also grown strongly in recent years.CEnergyUtilitiesTransportDigital infrastructureSocial infrastructure(including Healthcare and Education)2014 2015 2016 2017 2018 2019 2020 2021 20
17、222014 2015 2016 2017 2018 2019 2020 2021 2022201320136Infrastructure Investment Outlook 2023Roland BergerD/Infrastructure fundraising by fund strategy,2018-22 USD bnOne segment not covered in this data is Hybrid infrastructure the crossover space between business services and infrastructure and it
18、has been gaining a lot of attention from infrastructure investors.Despite a slowdown in deal value,infrastructure fundraising was at its peak in 2022.A total of USD 152 billion was raised by infrastructure funds 24%growth over 2021.Most of this growth was driven by Core+funds which nearly doubled in
19、 2022.Since 2018,the share of North America in global fundraising has grown significantly,especially for Core+and Value-add strategies.D,EInfrastructure Investment Outlook 20236Roland BergerSource:Preqin,Roland BergerFunds with Energy&Utilities as core industry20189888%201910287%20208677%202112378%2
20、02215288%272536306334320646446145CoreCore+Value-addOpportunisticNumbers may differ slightly due to approximationsFill in short topic here 7Roland BergerE/Infrastructure fundraising by geography and fund strategy,2018-22 USD bnInfrastructure Investment Outlook 20237Roland BergerSource:Preq
21、in,Roland BergerShare of total fundraising40%48%8%5%59%36%5%1%CoreCore+Value-addOpportunisticNumbers may differ slightly due to approximations2018 2022 89.254.438.846.47.74.68.00.83.322.412.80.33.220.110.213.01.51.34.42.21.70.926.626.91.442.626.918.37.1EuropeEuropeNorth AmericaNorth AmericaAsia-Paci
22、ficAsia-PacificRest of worldRest of world8Infrastructure Investment Outlook 2023Roland BergerCurrent sentiment and outlook for 20232/To gauge investors expectations for infrastructure investments in 2023,we surveyed experienced investment bankers and fund managers.90%of the respondents have been act
23、ive in the infrastructure investments space for more than five years and 55%have been active in the space for more than ten years.A little over 50%of the respondents believe that infrastructure M&A deal count in 2023 will either remain stable or decline slightly(vs.2022).This indicates a continuatio
24、n of the headwinds we saw in the second half of 2022,albeit at a F/Outlook for infrastructure deal count by asset size,2023 vs.2022(n=66)%of respondents Infrastructure Investment Outlook 20238Roland BergerSource:Roland BergerStrong decline(below-10%)Moderate decline(-5%to-10%)Slight decline(up to-5%
25、)Stable(0%)Slight growth(0%to 5%)Moderate growth(5%to 10%)Strong growth(over 10%)Cant say/no opinionOverallUSD 5.0 bn40%30%20%10%0%9Infrastructure Investment Outlook 2023Roland Bergerslower speed.In terms of asset/deal size,the majority of respondents expect deal count to remain stable or decline sl
26、ightly,although their outlook is more negative for larger deals.A number of respondents did not opine on the outlook by asset/deal size.This can partly explain the lower numbers under“slight decline”by asset/deal size when compared to the same for the overall outlook.FRespondents were least optimist
27、ic about Europe,where the majority expect a slight or moderate decline in infrastructure deal count in 2023.Proximity to the Russia-Ukraine conflict,higher net cost of Russian sanctions leading to higher inflation,higher interest rates,and eventually higher cost of borrowing were all the factors pos
28、sibly driving this view.GIn terms of sectors,respondents were most optimistic about Energy and Digital infrastructure,followed by Transport and Utilities(including Waste).Hybrid infrastructure assets are also increasingly being seen as an attractive option by infrastructure funds seeking higher retu
29、rns.These assets are non-traditional assets exhibiting certain infrastructure characteristics.HG/Outlook for infrastructure deal count by geography,2023 vs.2022(n=66)%of respondentsInfrastructure Investment Outlook 20239Roland BergerSource:Roland BergerStrong decline(below-10%)Moderate decline(-5%to
30、-10%)Slight decline(up to-5%)Stable(0%)Slight growth(0%to 5%)Moderate growth(5%to 10%)Strong growth(over 10%)Cant say/no opinionEuropeNorth AmericaAsia-PacificRest of world40%30%20%10%0%10Infrastructure Investment Outlook 2023Roland BergerRespondents specified several macroeconomic and geopolitical
31、factors responsible for their outlook of infrastructure investments in 2023.The key concern raised was the overall macroeconomic situation,with over 50%of the respondents expecting it to get worse in 2023.The other main concern was the availability of debt financing due to high interest rates.As a r
32、esult,the majority of the respondents expect fundraising in 2023 to be more difficult than in 2022,and more than 80%expect value creation to become more important compared to 2022.IH/Outlook for infrastructure deal count by sector,2023 vs.2022(n=66)%of respondentsSource:Roland BergerStrong decline(b
33、elow-10%)Moderate decline(-5%to-10%)Slight decline(up to-5%)Stable(0%)Slight growth(0%to 5%)Moderate growth(5%to 10%)Strong growth(over 10%)Cant say/no opinionTransportationEnergyUtilities(excluding Waste)Waste40%30%20%10%0%Social infrastructure:HealthcareSocial infrastructure:EducationDigital infra
34、structureHybrid infrastructure40%30%20%10%0%11Infrastructure Investment Outlook 2023Roland BergerFill in short topic here 11Roland BergerI/Development of factors influencing infrastructure investments and fundraising,2023 vs.2022(n=66)%of respondents Infrastructure Investment Outlook 202311Roland Be
35、rgerSource:Roland BergerOverall economic situation/economic cycleAlmost two-thirds of the respondents believed that fundraising will be challenging in 2023 vs.202264%86%More than four-fifths of the respondents believed that value-creation will become more important in 2023 vs.2022Decreasing order of
36、 importanceGeopolitical environment(e.g.,Ukraine war,trade conflicts)Global infrastructure funding gapAvailability of debt financing and interest ratesAvailability of attractive acquisition targetsCOVID-19 pandemic-led concernsWorsenRemain stableImproveCant say/no opinion12Infrastructure Investment
37、Outlook 2023Roland BergerSector outlook and analysis3/We further surveyed the participants on various infrastructure sectors to understand two key aspects:1.Investment focus:Given the current macroeconomic environment,we wanted to know how participants expect their investment focus to change across
38、the Core,Core+,and Value-add strategies.At a broader level,most respondents considered Core+and Value-add assets as more attractive in 2023 than in 2022.There were nuances in some sub-sectors which we will address in the respective sections.2.Future attractiveness:In addition,we wanted to understand
39、 which infrastructure assets are deemed more attractive in 2023 than they were in 2022.We also gathered interesting insights into each of the sub-sectors and asset types which investors expect to focus on in 2023.We now delve into each of the sectors,presenting the output of the survey and Roland Be
40、rgers views on investment activity in these sectors.3.1/EnergyInvestor sentiment towards Energy infrastructure is a clear winner in our 2023 survey,with focus expected to increase across the board,particularly for Core+and Value-add portfolios.This is again primarily driven by the need for energy tr
41、ansition.JLeading the way are electrification sectors.Over three-quarters of respondents see EV charging and energy storage assets as attractive,as well as over half also see the electrification of heat through heat pumps as attractive.The success of the UK,Germany,and other European economies in de
42、carbonising electricity through renewable generation means that extending electricitys share of primary energy markets has clear long-term tailwinds.The increasing cost competitiveness of both supply technologies like solar and wind,and demand technologies like EVs and heat pumps accelerate these dr
43、ivers,as the investment risks associated with direct subsidy no longer have weight both market forces and environmental demands are increasingly aligned.The nascent nature of electrification markets means that they are not yet Core assets utilisation risk in EV chargers and grid stability fee pricin
44、g volatility for batteries illustrate why such investments remain the reserve of riskier portfolios.However,infrastructure funds are increasingly familiar with these investment cases as deal flow increases and precedents for infrastructure-like investments and returns become more commonly accepted.W
45、e anticipate that even accounting for the near-term challenges caused by post-Ukraine electricity price spikes,growth in EV charging and storage projects will continue,with heat pumps serving both heating and cooling in markets where the grid strength allows it.13Infrastructure Investment Outlook 20
46、23Roland BergerJ/Energy infrastructure survey results(n=45)%of respondentsRelative focus by asset type,2023 vs.2022Most attractive assetsInfrastructure Investment Outlook 202313Roland BergerSource:Roland BergerDecrease significantlyDecrease slightlyNo changeIncrease slightlyIncrease significantlyCan
47、t say/no opinionCoreCore+Value-add50%40%30%20%10%0%1 Carbon Capture,Utilisation,and Storage89%Energy storage/batteries58%Heat electrification/heat pumps40%Grid scale solar62%Green Hydrogen or other P2X51%Other Biofuels/Biogas33%Onshore wind76%Mobility electrification/EV charging53%CCUS140%Sustainabl
48、e aviation fuels(SAFs)58%Energy efficiency schemes42%Offshore wind22%Blue Hydrogen2%Commercial and industrial energy services“Electrification assets such as storage,EVs,and heat pumps are very attractive for investors as the investment risks associated with direct subsidy no longer have weight.”Ener
49、gy efficiency schemes is a conspicuous and perhaps surprising constituent within the top five most attractive investment opportunities for infrastructure funds.In many ways,energy efficiency is the perfect Core infrastructure fund investment offtake agreements are typically very reliable,and capital
50、 returns are made on energy savings from well-proven technologies.The main 14Infrastructure Investment Outlook 2023Roland Bergerimpediments to such schemes,namely the diffuse nature of such schemes in less energy-intensive sectors,and the short-termist demands of industrial and commercial off-takers
51、 have remained largely unchanged in Europe for a decade or more.However,these impediments are now outweighed in the eyes of investors by the expectation of persistently high energy costs an expectation that was growing for several years,but has been reinforced by the war in Ukraine.Increasingly inno
52、vative ways to package such schemes are serving this investor appetite,which have evolved from simple schemes like LED streetlights through to more complex schemes on the borders of asset refurbishment,supply chain redesign,and demand-side management.Energy vector substitution investments in green h
53、ydrogen“P2X”,carbon capture,and biofuels make up the rest of the categories seen by most respondents as most attractive(with SAFs and blue hydrogen not too far behind).This is perhaps the most surprising addition of all on this years survey and shows the extent of acceptance of the societal imperati
54、ves of climate change.All these investments upgrade one type of energy into another,more environmentally acceptable,form.In very few applications do any of these forms make economic sense in current markets without support:spare green electricity for P2X can be traded more profitably on electricity
55、networks where it is in great demand than in another P2X energy vector;CCUS is expensive,largely unproven at scale,and remains difficult to monetise;biofuels are more expensive than fossil fuels and are constrained by scale.Even with increasingly liquid and valuable markets for carbon pricing,few su
56、ch projects can be seen as bankable without the sort of direct project-level subsidies that infrastructure funds have traditionally found difficult.The view of our respondents seems to be that the taxpayer support needed,as with sectors like Offshore wind,is now a bankable reality.Strong demand for
57、a low carbon roadmap from hard-to-reach industries,for example,for airline SAFs,green steel hydrogen or cement CCUS align with these interests,and deal flow is now emerging for the highest risk portfolios.It is telling,and perhaps indicative of the sample set being skewed towards higher risk and ret
58、urn profiles,that a minority of our respondents now see mainstream renewable power generation assets as very attractive,registering support from around 30%to 40%.Onshore wind and solar are now typically the lowest cost electricity source where conditions allow,despite recent input cost inflation.Off
59、shore wind,not long ago a very risky and highly subsidised market,is now seeing previously inconceivably large 10MW turbines being routinely deployed and farms traded at GW scale,in some cases free from subsides.It is the great hope of European governments,spurred on by the needs of RePowerEU,that t
60、he sizeable minority of our recipients who still view these generating assets to be very attractive,represent deep pools of liquidity.Targets“Energy efficiency schemes are attractive due to increasingly innovative ways to package such schemes and the expectation of persistently high energy costs.”15
61、Infrastructure Investment Outlook 2023Roland Bergerfor deployment are now hugely ambitious,with a need for all installed base types to double then double again in service of the increasing electrification drivers described above.This hope is far from a foregone conclusion returns have fallen as the
62、technology has gained mass acceptance and commoditisation has freed it from the need of subsidies.Risks remain in this sector,however,and are not always commensurately rewarded.As a particular case in point trading terms,clumsy regulation taxing windfalls,and supply chain difficulties have contribut
63、ed to the rate of wind turbine installations in Europe,falling by almost a half in 2022.It must be hoped that investment-friendly conditions will again prevail.3.2/Utilities(including Waste management)Waste management has become an important topic within Utilities.The share of Waste in overall Utili
64、ty infrastructure deals has grown from 7%in 2018 to 14%in 2022.Hence why,in this issue,we decided to dive into Waste management rather than covering Utilities at a broader level.Financial sponsor-led M&A activity in Waste management has grown at rapid pace.As the risk-return profile of Waste assets
65、has been changing,the direction of wind has decisively been in favour of infrastructure funds vis-vis private equity funds.KAssets in the Waste ecosystem display infrastructure characteristics at varying levels.In addition to being regulated and providing essential services to the economy,most Waste
66、 asset types exhibit strong barriers to entry and competitive positioning at a catchment area level.The existence of long-term contracts underpinning cash flows varies across the value chain,but customer-supplier relationships are sticky and cash flows broadly stable.The industry regulation is based
67、 on“polluter pays”principle,therefore,inflation linkage of revenue streams is commonplace across the Waste value chain.And given the ever-increasing importance of a circular economy and regulatory targets,there is potential for growth as well as value creation.Investment opportunities in the sector
68、can be analysed in terms of waste type(hazardous or non-hazardous),value chain coverage,and the relative country maturity in Waste management.Hazardous waste assets are somewhat of a niche.Hazardous waste arisings are tiny compared to non-hazardous.Yet,hazardous waste assets of scale can be highly a
69、ttractive given their inherently higher margin profile,higher customer willingness to pay,and strong entry barriers driven by licences and specialist know-how;however,the presence of large vertically integrated waste managers across both hazardous and non-hazardous waste limits the availability of i
70、ndependent hazardous waste management platforms of scale.Non-hazardous waste assets on the contrary offer scale as well as availability of platforms.A“As EV parc grows,EV battery recycling is seen as the most important Waste infrastructure asset of tomorrow.”16Infrastructure Investment Outlook 2023R
71、oland BergerInfrastructure Investment Outlook 202316Roland BergerK/Utilities(including Waste management)survey results(n=26)%of respondentsRelative focus by asset type,2023 vs.2022Most attractive assets“within Waste”Source:Roland BergerDecrease significantlyDecrease slightlyNo changeIncrease slightl
72、yIncrease significantlyCant say/no opinionCoreCore+Value-add50%40%30%20%10%0%73%EV battery recycling42%Waste processing and recycling hazardous23%Incinerator bottom ash recycling54%Waste processing and recycling non-hazardous23%Integrated waste managers hazardous58%Energy from Waste31%Chemical recyc
73、ling of plastics46%Integrated waste managers non-hazardous23%Mechanical recycling of plastics“The tailwinds from circular economy targets provide a big opportunity to deploy capex to increase recycling and create economic value for the owners.”good portion of business has exposure to municipalities
74、as contracting parties for household waste,and inflation-linked,longer-term contracts are prevalent.Moreover,the tailwinds from circular economy targets provide a big opportunity to deploy capex to increase recycling and create economic value for the owners.Value chain coverage is a significant fact
75、or driving difference in asset characteristics.The more downstream Energy from Waste(EfW)assets were the focus of infrastructure fund investments over the last five years.Long-term and inflation-linked contracts,relatively predictable demand-supply dynamics,capex and technology intensity,and strong
76、EBITDA margins are some of the hallmarks of EfW assets.Notwithstanding overcapacity issues in some European 17Infrastructure Investment Outlook 2023Roland Bergermarkets like The Netherlands,“Core”infrastructure investment case for EfW assets is clearer than ever.In balanced EfW supply-demand markets
77、,strategic growth and value creation opportunities include carbon capture and expansion into recycling.Recycling and reprocessing is arguably the hottest area of infrastructure fund investment in the Waste sector currently.There is a case for significant investment in recycling infrastructure to mee
78、t circular economy targets.Profit margins are good and entry barriers are high,especially if the asset has access to input volumes;however,stability of cash flows due to exposure to commodity prices needs to be managed.Proactively managing margins or sharing across the value chain,the pain and gain
79、resulting from commodity price fluctuations can help de-risk cash flows and strengthen infrastructure characteristics.Some of the interesting recycling and reprocessing asset types by waste material are outlined below:There is structural shortage of plastics reprocessing capacity in Europe.Any long-
80、term sustainable solution must involve domestic infrastructure roll out rather than dependence on exports.Technological developments in smart sorting and reprocessing are enabling improved yield and purity of recycled plastic,thereby improving the business case of reprocessing.Whilst deployed at sma
81、ll scale right now,chemical recycling of plastics(over traditional mechanical recycling)offers promise for contaminated plastics.As EV parc grows,EV battery recycling is deemed the most attractive Waste infrastructure asset in our survey.Recycling of incinerator bottom ash(by product of waste incine
82、ration)provides interesting circularity to incinerated waste.The most value here is in reprocessing of non-ferrous metals.Whilst the continued absence of subsidy support leaves anaerobic digestion without clear direction,momentum is growing,and deal flow is starting to stir after a lost decade.This
83、is driven by European ambition and emerging biomethane models,themselves driven by carbon prices.Waste collection and logistics businesses,especially of small scale,were seen as the least likely candidates for infrastructure fund investments given their low barriers to entry and low margins.However,
84、given the importance of access to,and control of,waste volumes for downstream recycling and reprocessing business,infrastructure funds are spending time accurately valuing these assets more so when they are part of large integrated waste managers.Integrated waste managers provide a portfolio of some
85、,or all,the above activities.They not only display strong infrastructure characteristics,but also best internalise the margins from holistic waste management.Many of the largest integrated waste managers in the UK are currently owned(fully or partially)by infrastructure funds.Maturity of waste manag
86、ement by country can further help identify and assess investment opportunities.The risk-return profile of similar asset types could vary by country.For example,EfW assets fit better within a Core infrastructure fund in balanced markets like Germany,Austria,and the UK.Whilst the UK market has EfW und
87、er-capacity,it also has a clear pathway to 18Infrastructure Investment Outlook 2023Roland Bergerdemand-supply balance given a strong pipeline of new EfW plants.In relatively less mature EfW markets like France,Spain,Italy,and Poland,new EfW plants will have a higher risk-return and could attract Cor
88、e+or Value-add funds.3.3/TransportElectrification firmly in focus,other opportunities emergingThe electric mobility revolution is fundamentally transforming the nature of the transport infrastructure landscape.Investors,historically favouring Core transport assets with steady,long-term return profil
89、es,have shifted firmly into Core+and Value-add territory,as exemplified by recent EV charging transactions such as Electrada,Wattif,Zeplug,and Instavolt.This wave shows no sign of receding,with more than 50%of transport infrastructure investors expecting Core+and Value-add assets to be more attracti
90、ve to them in 2023 than previously,particularly in relation to EV charging,which continues to dominate deal flow.L Whilst electrification is the central theme and key driver of change in road transport infrastructure,the value it will create for assets includes revenue streams such as retailing(e.g.
91、,at motorway service areas)and advertising(e.g.,charging networks),in addition to energy storage and grid balancing/trading type activities(when combined with battery deployments).The drive to zero-emission and decarbonising transport is not all about electrification biofuels and hydrogen are set to
92、 provide alternative means of propulsion,especially in heavy duty road vehicles,whilst sustainable aviation fuels and greener marine fuels(e.g.,LNG,ammonia,and hydrogen)will create a raft of opportunities in the provision of infrastructure,associated equipment,and services.Decarbonisation is also in
93、 focus within other traditional transport infrastructure sub-sectors,such as rail locomotive leasing and ferry operators.Companies that are already in transition or offering a clear plan towards decarbonisation are being favoured.Infrastructure key in a developing EV charging ecosystem Within the do
94、main of road transport,the EV charging ecosystem is developing rapidly as market participants try to muscle in on the opportunities that electrification offers focused initially on passenger cars,light commercial vehicles and some heavy vehicle segments such as buses,and specialised equipment such a
95、s refuse vehicles,but with huge future potential in broader heavy commercial vehicle segments.Key players across the EV charging value chain include energy producers and distributors(including utilities),engineering services providers(including installers and project developers),charger hardware man
96、ufacturers,front-end and back-end software developers,and charge point operators(CPOs).Many of these areas have witnessed rapid growth in their nascent phases with business models still fluid and suppliers proliferating rapidly though some cracks are starting to 19Infrastructure Investment Outlook 2
97、023Roland BergerInfrastructure Investment Outlook 202319Roland BergerSource:Roland BergerDecrease significantlyDecrease slightlyNo changeIncrease slightlyIncrease significantlyCant say/no opinion1 Passenger cars mainly;2 MSAs;3 Hydrogen,biofuelsL/Transport infrastructure survey results(n=44)%of resp
98、ondentsRelative focus by asset type,2023 vs.2022Most attractive assetsCoreCore+Value-add50%40%30%20%10%0%75%EV charging for commercial fleets43%First and last mile logistics16%Fuelling stations64%EV charging hubs134%Fuelling stations for commercial fleets364%EV charging infrastructure134%Car parks9%
99、Toll roads61%Motorway Service Areas232%Mobility hubs“EV charging-related infrastructure is seen as distinctly more attractive than other transport assets,both for commercial and passenger vehicles.”appear.Questions are emerging regarding CPO valuations,and charge manufacturers going out of business
100、as supply chain issues and other growing pains throttle expansion against a backdrop of commoditisation.Undoubtedly,one of the strongest positions is held by those who own and/or operate the land and facilities on which(public)charging will be done.Whilst charging technologies come and go(and as har
101、dware becomes more ubiquitous and its operation more quotidian),charge point operators value propositions and business models continue to evolve,yet providing the right locations for vehicle charging will always be critical.20Infrastructure Investment Outlook 2023Roland BergerThis provides investors
102、 an opportunity to capture the public charging opportunity through Core/Core+type assets,but also to drive growth in adjacent revenue streams in a manner symbiotic with EV charging and traditional road transport infrastructure propositions.Assets such as motorway service areas,charging hubs,car park
103、s,and fuelling stations will play a key role in enabling cleaner road transport.EV charging locations focusing on passenger car use casesWhilst more than half of personal car charging will likely be done at home(via private dedicated charging hardware or standard electrical connections),a significan
104、t proportion of charging will be reliant on publicly(or semi-public)accessible infrastructure.Huge investment in infrastructure(electrical grid connections,energy storage,chargers)is required in all the key use cases:On route charging at motorway service areas,fuel forecourts,dedicated charging hubs
105、,and roadside bays,provide easy access to rapid charging from major road routes,and as such location(both absolute and relative)is critical to achieving high charger utilisation and attractive returns.In some cases,investments in such locations will be greenfield in nature,for example,Gridserves Ele
106、ctric Forecourts at Norwich,Braintree and Reading,and Fastneds various UK hubs.Other brownfield type locations have different dynamics,for example,whilst overall fuel forecourt numbers in many markets are expected to continue declining,some sites will remain highly attractive as EV charging location
107、s in the long-term or combined fuel/EVCS/retail propositions in the ICE/EV transition period.Destination charging in the car parks of supermarkets,retail outlets,restaurants and the like,enables EV users to charge(at slower rates)whilst they are otherwise engaged at amenities.Workplace charging will
108、 enable employees to charge at work.EV charging locations focusing on commercial fleet use casesVehicle fleet operators are coming under increasing pressure from stakeholders(customers,shareholders,employees)to decarbonise.Whilst other alternative fuel solutions will be relevant in certain segments,
109、fleets of cars,vans,and some heavier vehicles(such as buses)will typically achieve this using electric propulsion,as demonstrated by interesting developments such as the Traton-Volvo-Daimler joint venture committing to invest at least EUR 500 million to install and operate more than 1,700 charge poi
110、nts on,and close to,highways and logistics hubs across Europe.Again,significant and highly targeted investment will be required over the next two decades to bridge the gap to meet huge demand from commercial fleets,but there are significant challenges.Not only will electricity grid and space constra
111、ints make it difficult to roll out ultra-rapid charging infrastructure,but also given the relative immaturity of EV technology application in some segments(e.g.,logistics),in some cases,upfront investment will likely not 21Infrastructure Investment Outlook 2023Roland Berger“EV charging locations foc
112、using on passenger car use cases,such as charging hubs or on route charging places(e.g.,MSAs)will require huge investments,making them very attractive.”generate a return for at least eight to ten years.However,there are some mitigating factors in considering investment opportunities:Motorway service
113、 areas and comparable locations on major routes will be attractive EV charging sites for diverse fleets.They are reasonably well protected by regulation and likely to be underpinned by longer-term offtake type agreements with OEMs and/or fleet operators.Depots for vehicles such as buses and last-mil
114、e logistics fleets are increasingly high-priority for electrification.They are underpinned by commitments and investment from government bodies and major fleet operators.Whilst owning such depots is typically a less accessible play for investors,service providers such as Zenob and Voltera represent
115、angles into a space with many infrastructure-like characteristics.Investment in charging hubs for cars and vans can be recouped through both general public access and fleet business.In some cases,such as at BP pulse hubs in Germany and the UK,fleet customers are offered special access to dedicated c
116、hargers as a differentiator to win B2B contracts.Car parksHistorically a mainstay of infrastructure investors,but recently maligned due to concerns over autonomous vehicle technology,car parks have been reinvigorated due to their potential as EV charging locations(as well as for last mile logistics)
117、.Car park operators are increasingly partnering with CPOs to roll out charging offerings,and in the future we expect more B2B activity around car parks,such as charging contracts for vehicle fleets.Alternative fuelling stations for commercial fleets,such as hydrogen or biofuelsWhilst EV technology i
118、s emerging as the clear winner for segments of the commercial vehicle landscape,in other areas,such as long-haul heavy goods transport,liquid fuels(biodiesel,hydrogen,bio-CNG/LNG)will likely provide a key route to decarbonisation.Fuelling station business models should not be drastically different t
119、o todays diesel fuel world fleet operators have bunkered fuel card type agreements with fuel providers and can access fuel at stations across their networks though some disruptors are proposing hydrogen vehicle-as-a-service type models.Alternative fuels will differ from EV charging in the sense that
120、 much of the basic infrastructure and equipment(fuel stations,storage tanks,pumping systems)already exists or can be modified to accommodate alternative fuels.Today,dedicated alternatively fuelled vehicles(hydrogen,natural gas)represent less than 1%of the EU27 parc,but significant growth is expected
121、,and 22Infrastructure Investment Outlook 2023Roland Bergerdemand for renewable diesel(which can generally be used in traditional diesel combustion engines)will develop at pace in the short-and mid-term.All will require appropriate fuelling infrastructure accessible to commercial fleets.3.4/Digital i
122、nfrastructureFor the decade preceding 2022,we have witnessed phenomenal growth in Digital infrastructure investment.Both in terms of deal numbers and value,Digital infrastructure has consistently grown its share of the total infrastructure investment space,representing a quarter of total deal value
123、in recent years.Over this period,we have also seen target IRRs typically fall from mid-to-high teens to high single digits and,as a result,a crowding out of traditional private equity investment in favour of infrastructure funds.A growing trend of minority deals has also pushed M&A activity towards
124、infrastructure and pension funds.The three Core digital asset classes of data centres,towers,and fibre all tend to exhibit traditional infrastructure characteristics of essential services to the economy,high capex and barriers to entry,limited competition within a geographic catchment,sticky custome
125、rs and/or long-term contracts,and an element of regulation,most notably in fibre.One key driver of historical M&A activity has been the de-verticalisation of incumbent telcos carving out the towers to towercos,disposing of their data centre portfolios and formalising netco/servco models with new inf
126、rastructure financing for the netco.Overall,2022 was the first year-on-year decline in Digital infrastructure deals in both number of deals(-7%)and value(-15%).It was a year of two halves:with H12022 holding steady vs.a 40%decline YoY for the second half of the year.Against the backdrop of rising in
127、flation,interest rate increases,and the threat of recession,this decline in Digital infrastructure M&A deals was perhaps not surprising.Increases in base interest rates and even greater increases in debt financing costs is highlighted as a key issue affecting Digital infrastructure deal activity.Buy
128、ers are now expecting an associated step down in asset valuations,but many sellers have been reluctant to date,which is leading to prolonged and/or aborted processes.H2 2022 saw the most significant YoY decline in fibre deals.There are two key reasons:1.Across many geographies,there is evidence that
129、 fibre/broadband prices have not kept pace with inflation.2.There are concerns regarding“over-build”risk and lower-than-expected take-up related to local fibre specifically.Regardless,our survey suggests that infrastructure investors are relatively optimistic about future investments in the Digital
130、infrastructure space.On balance,we see more of an increased focus rather than decreased,and this is especially true of Core+and Value-add strategies.M23Infrastructure Investment Outlook 2023Roland BergerSource:Roland BergerDecrease significantlyDecrease slightlyNo changeIncrease slightlyIncrease sig
131、nificantlyCant say/no opinion1 Buildings,billboards,EV charging,poles,etc.Within Core+,edge computing is currently attracting the most interest.Investors speak of the limitless increases in data consumption,double-digit growth in public cloud and hyperscaler demand,along with the growth of new low-l
132、atency use cases for the strong interest in edge computing.We also see enterprise interest in repatriating some hyperscale workloads to the edge to reduce traffic charges.There is reasonable interest in small cells and other smart/edge infrastructure,although this varies significantly by geography.D
133、ue to various market dynamics,the US,China,and a few other smaller countries are leaders in the deployment of small cells with correspondingly larger Digital infrastructure investment appetite Europe is largely seen as lagging by a few years.Value-add Digital infrastructure investment is also,on bal
134、ance,relatively positive looking forward.Several XaaS solutions are increasingly being seen as infrastructure-like.Leveraging big data,along with ML and/or AI and/or IoT-enablement is leading to a blurring of traditional technology,software,and infrastructure boundaries.We expect a continued growth
135、in netco/servco models to unlock inherent value in NFV-enabled networks.M/Digital infrastructure survey results(n=36)%of respondentsRelative focus by asset type,2023 vs.2022Most attractive assetsCoreCore+Value-add50%40%30%20%10%0%83%Edge computing/data centers47%Other smart/edge infrastructure156%Sm
136、all cells31%ML/AI-as-a-service“Edge computing is by far viewed as the most attractive segment,with investors expecting increases in data consumption and public cloud and hyperscaler demand.”24Infrastructure Investment Outlook 2023Roland BergerAll of this points to a 2023 that is anticipated to be th
137、e reverse of 2022:somewhat subdued in the first half but leading to increased M&A activity in the second half and beyond.With this activity,however,will also come increased complexity of deals and deal structures,along with a stretching of the traditional view of Digital infrastructure asset classes
138、.3.5/HealthcareInfrastructure investment in Healthcare is seeing increased interest given the lingering impact of the pandemic and current macroeconomic uncertainty,with 2022 investment value 20%above 2019 levels.Whilst so far investor interest has been more pronounced in traditional private equity
139、assets,there are many areas which are interesting to infrastructure investors,both in traditional infrastructure assets like care homes,and emerging assets like diagnostics labs and equipment leasing and services.Healthcare assets driven by government funding are resilient in downturns and have high
140、ly inelastic time-sensitive demand,limiting downside exposure.Even private healthcare services can be thought of as essential in mixed public/private systems(as seen across much of Europe)given the willingness of governments to step in to prevent market failure and limit wait-times.Across most of th
141、e developed world,stringent licensing and regulatory requirements lead to high barriers to entry for new players,further supported by limited doctor availability.Long-term growth prospects and cash-flows are underpinned by favourable demographic megatrends including aging populations,increasing pros
142、perity,and the increasing burden of chronic diseases.The main concern that has historically held investors back from the sector is clinical risk and the major financial and reputational consequences that can result.Our survey highlights Core+and Value-add assets as the key areas of focus for investo
143、rs in 2023.Diagnostics labs,assets with innovative equipment leasing and service offerings,and care homes are considered most attractive.NDiagnostics labs saw significant growth over 202022 due to demand for COVID-19 testing,much of which required centralised,quality-controlled testing locations.Fol
144、lowing COVID-19,testing labs are being used by governments as an essential lever to shift towards a preventative healthcare model and lower overall system costs.COVID-19 induced demand replaced a broader set of immunodiagnostic and MDx assays,which have higher laboratory requirements.Whilst more com
145、monly seen as private equity assets,both testing and imaging labs are increasingly coming into focus for infrastructure funds as shown by the acquisitions of Amedes by Antin Infrastructure and Meine Radiologie by EQT Infrastructure,respectively.Furthermore,in developed markets there are also strong
146、barriers to entry from certification/licensing requirements and limited clinician availability particularly within radiology.“Both testing and imaging diagnostics labs are increasingly attractive,as governments try to use COVID-built testing labs for preventative healthcare.”25Infrastructure Investm
147、ent Outlook 2023Roland BergerSource:Roland BergerDecrease significantlyDecrease slightlyNo changeIncrease slightlyIncrease significantlyCant say/no opinion1 Excluding dentalN/Healthcare infrastructure survey results(n=19)%of respondentsRelative focus by asset type,2023 vs.2022Most attractive assetsC
148、oreCore+Value-add50%40%30%20%10%0%63%Diagnostics labs32%Special(healthcare)education needs16%Mental health chains42%Care homes21%Dental clinics53%Healthcare equipment leasing and services26%Private clinics137%Pharmacy chains16%Ophthalmology chains“Healthcare equipment leasing and services is a growi
149、ng offering,especially during current times of budgetary constraints,as primary care facilities look to defray capital expenditures.”Healthcare equipment leasing and services are a growing offering,as primary care facilities look to defray capital expenditures during times of significant budget pres
150、sure.This business model is seen across all capital equipment,most commonly imaging equipment,orthopaedics/prosthetics,and endoscopy apparatus.The model fits well for infrastructure funds due to high revenue security and visibility from long-term contracts(typically with inflation linkages),and limi
151、ted clinical risk exposure as the operator is typically separate to the lessor.Care homes(both residential and nursing)were hit hard by COVID-19,with significant short-term disruption to utilisation and staffing,and increased operational costs creating opportunities for acquisition of the historical
152、ly less 26Infrastructure Investment Outlook 2023Roland Bergerwell-capitalised players.The sector is now recovering,with the key long-term drivers of ageing populations and increasing prosperity in developing markets expected to be sustained.Private clinics and specialised clinics(mental health chain
153、s,ophthalmology chains,and dental clinics)were seen as less interesting for investment in 2023,largely reflecting high exposure to clinical risk and lower cashflow security vs.other asset classes.3.6/EducationInfrastructure investors are increasingly showing more interest in the education sector as
154、Core+or Value-add investment opportunity,and the next few years are likely to see an even greater interest.O The education sector is characterised by stable,predictable cash flowsEducation benefits from positive working capital cycles:clients pay in advance at fixed times of the year and costs are b
155、udgeted for throughout.Whilst long-term contracts are not prevalent in the sector,cash flows remain highly predictable.Some of the key drivers include:Demography,one of the key drivers of education,enables a level of confidence in long-term projections.Enrolments in higher education have been steadi
156、ly growing in several countries,gross enrolment ratios in higher education have significantly increased since the late 1990s.The share of private sector in key European countries has been growing given the chronic underfunding of public education and increased agility of private players against evol
157、ving employer needs.Programmes encouraging apprenticeship/vocational training in countries such as Spain and the UK also contribute to the growing share of private providers.International students enrolment is progressively recovering from the impact of COVID-19 and is growing at 5%p.a.globally.The
158、Education sector has proven to be highly resilient to economic cycles.Parents consider their childrens education a necessity,and students enrolments have not been affected by crises over the past 20 years.Education benefits from neutral or supportive regulatory trends in EuropeEducation has not been
159、 the sector with the most supportive regulation;however,more favourable regulations for the private sector have recently been observed,particularly in Spain and France with the reforms of VET(“formacin profesional”)and apprenticeship(“apprentissage”),respectively.In France,nearly a million students
160、have enrolled in these programmes,with their full tuition fees funded by employers.Training providers specialising in 27Infrastructure Investment Outlook 2023Roland BergerO/Education infrastructure survey results(n=19)%of respondentsRelative focus by asset type,2023 vs.2022Most attractive assetsCore
161、Core+Value-add50%40%30%20%10%0%56%Primary and secondary schools22%Universities50%Early education/nurseries6%Vocational training and retraining“Investors are particularly interested in the more mature,easy to invest segments of early and secondary stages of education.”Infrastructure Investment Outloo
162、k 202327Roland BergerSource:Roland BergerDecrease significantlyDecrease slightlyNo changeIncrease slightlyIncrease significantlyCant say/no opinionapprenticeship have seen a surge in profit margins,benefitting from both a positive volume and price effect.Early education and nurseries are the most ma
163、ture segmentsM&A activity in the segment of early education/nurseries in Europe has been quite dynamic over the last three years.Antins investment in Babilou(2020)and Infravias participation in Grandir(2021)are cases in point.Primary/secondary education segment has also witnessed major deals such as
164、 the acquisition of Inspired Education Group by Stonepeak in 2022.Student accommodation projects have also been of interest to investors in recent years,with several deals completed(DIFs investment in student residences at the LSE or Goldsmiths University,Equitixs investment in Stanhope and Kingston
165、 in the UK,PPGMs investment in RESA in Spain,etc.).In higher education,private-equity-backed groups(Galileo,Omnes,etc.)are gradually building strong barriers to entry,thereby attracting infrastructure 28Infrastructure Investment Outlook 2023Roland Bergerinvestors to the segment.These players are inv
166、esting in their campuses(often multi-disciplinary,with state-of-the-art equipment),educational programmes(requiring complex public authorisations)and intangible assets constituted by their networks of companies and alumni.3.7/Hybrid infrastructureHybrid infrastructure assets could be of two types ei
167、ther new assets within one of the traditional infrastructure sectors,for example,a pure battery storage platform in the start-up phase,or new assets that do not belong to one of the traditional infrastructure sectors,but where the business model or underlying sector exposure qualifies them as meetin
168、g many of the infrastructure asset test criteria.Here we focus on the second type as the former is mostly covered within the sector analysis in the earlier sections.PHybrid infrastructure assets are under the spotlight as many assets which were traditionally Core+or Value-add have moved into the Cor
169、e category(e.g.,fibre assets in urban areas of developed countries)and competition for traditional Core+or Value-add assets has increased.There are several asset types that are of particular interest:Specialist equipment rental is a high utilisation and high margin segment,especially when the end se
170、ctor demand is stable and predictable examples include Kelling Group(access platforms rental to infrastructure service providers for use in rail network maintenance)and SRL(temporary traffic light systems rental).Equipment as a service companies offer a proposition that combines equipment rental wit
171、h servicing and maintenance often underpinned by a dense service network.Modular construction unit leasing/rental businesses specialise in the rental of modular construction units(cabins or modules)and often serve stable end markets such as Healthcare and Education.The commercial opportunity lies in
172、 further penetrating the rental/leasing market(vs.direct sale)as well as generating more revenues from the provision of value-added services.Examples include Modulaire Group,Parmaco and Premier Modular.Industrial testing labs provide testing services whereby each lab caters to a local catchment area
173、.The market is characterised by stable regulatory-or compliance-driven end market demand growth,quite often with pricing improvement opportunities.Holiday parks/outdoor accommodation parks combine the characteristics of a real estate business with those of a site operator business and offer investor
174、s an opportunity to deploy capital to upgrade/renew the existing park infrastructure,drive premiumisation of its offering and generate stable income through management fee of the units/pitches on site.The sector has shown resilience in past recessions.Ageing population is a key driver of growth.Exam
175、ples include the acquisition of Sandaya(outdoor accommodation operator)by InfraVia.29Infrastructure Investment Outlook 2023Roland Berger Closed loop logistics businesses own and operate pools of assets that enable efficient movement of fruit and vegetables(companies such as IFCO)and beverage contain
176、ers made of glass for(companies such as Cartonplast).These are capex-intensive businesses and display several infrastructure characteristics such as high entry barriers,high market shares,lucrative unit economics delivering high margins,and long-term contracts with customers.P/Hybrid infrastructure
177、survey results(n=26)%of respondentsRelative focus by asset type,2023 vs.2022Most attractive assetsInfrastructure Investment Outlook 202329Roland BergerSource:Roland BergerDecrease significantlyDecrease slightlyNo changeIncrease slightlyIncrease significantlyCant say/no opinionCoreNo core assetsCore+
178、Value-add50%40%30%20%10%0%69%Specialist equipment rental8%Holiday parks/outdoor accomodation parks58%Modular construction unit leasing/rental69%Equipment as a service54%Industrial testing labs“The rental of equipment,either specialised,business-critical or of modular units,is very attractive in curr
179、ent times of budgetary constraints.”30Infrastructure Investment Outlook 2023Roland BergerCONCLUSIONGiven the macro environment we are in,the outlook for infrastructure investments that is evident from our survey is not entirely surprising.Yet,there are several interesting investment themes that will
180、 occupy investors minds.Investors are navigating two opposing forces:challenges in dealmaking and fundraising,and a continued impetus to invest along decarbonisation/energy transition/circular economy themes all the while expanding the frontiers of infrastructure investments.Against this backdrop,we
181、 believe that a differentiating factor would be to have a tangible value creation thesis before acquisition.Separate but related to this is a deep consideration whether de-risking the asset is possible over the next five years,as this might be a low hanging fruit for some but challenging for others.
182、For assets within current portfolios,updating the business plan to focus on new initiatives,thereby taking advantage of additional growth areas driven,for example,by customers energy transition needs,would help offset the slower growth driven by the current environment.31Infrastructure Investment Ou
183、tlook 2023Roland BergerAUTHORSSiongkoon Lim Partner +44 7967 674 859 We welcome your questions,comments and suggestions|Dr.Thorsten Groth Principal +49 160 7448325 Adam Healy Principal +44 7880 203 099 Gary Taylor Principal +44 7775 954 240 Tim Longstaff Partner +44 7880 202 910 Hrishikesh Potey Par
184、tner +44 7880 202 037 Michael Knott Senior Partner +44 7733 804 952 Kai Balder Partner +44 7880 203 059 Steve Danino Principal +33 6 37 47 35 52 This publication has been prepared for general guidance only.The reader should not act according to any information provided in this publication without re
185、ceiving specific professional advice.Roland Berger GmbH shall not be liable for any damages resulting from any use of the information contained in the publication.2023 ROLAND BERGER GMBH.ALL RIGHTS RESERVED.03.2023 Publisher:ROLAND BERGER LTD55 Baker StreetLondon W1U 8EWUnited Kingdom+44 20 3075 110
186、023_8_002_GB_04_INFRASTRUCTURE_INVESTMENT_OUTLOOK_2023ROLAND BERGER is the only management consultancy of European heritage with a strong international footprint.As an independent firm,solely owned by our Partners,we operate 51 offices in all major markets.Our 3000 employees offer a unique combinati
187、on of an analytical approach and an empathic attitude.Driven by our values of entrepreneurship,excellence,and empathy,we at Roland Berger are convinced that the world needs a new sustainable paradigm that takes the entire value cycle into account.Working in cross-competence teams across all relevant industries and business functions,we provide the best expertise to meet the profound challenges of today and tomorrow.