Infrastructure is no longer just about dependable income and downside protection. In FundCalibre’s latest podcast, Peter Meany, Manager of the First Sentier Global Listed Infrastructure fund, explains how the asset class is benefiting from powerful structural growth drivers.
Such drivers include AI-driven electricity demand, digital infrastructure expansion and the reshoring of manufacturing in the US.
Also discussed are the reasons why regulated utilities are seeing some of their strongest growth in decades, where opportunities are emerging across railroads and airports, and why infrastructure may be unfairly labelled as merely a bond proxy.
Finally, they examine valuations, the role of emerging markets, and why today’s combination of income, growth and attractive pricing makes listed infrastructure particularly compelling.
Why you should listen to the interview: Gain a fresh perspective on an often misunderstood asset class.
This interview explains why infrastructure can provide both defence and growth, how AI is transforming utility demand, and where attractive opportunities still exist globally. A must-listen for investors seeking resilient returns in an uncertain market.
This interview was recorded on 19 June 2026. Please note, answers are edited and condensed for clarity. To gain a fuller understanding and clearer context, please listen to the full interview.
Interview highlights:
Infrastructure is more than income
“Listed infrastructure is a great complement to a portfolio. Markets have done very well over recent years. Tech’s been very exciting, but listed infrastructure can help with defensive returns in a potential down market going forward.
“We’d always say the asset class can offer a 3% to 4% dividend yield and 5% to 6% earnings growth. And we are seeing better growth than that right now, which we’ll talk to.
“There’s a combination of inflation protection, growth that is structural by nature, and long-term drivers of that growth. You also typically get a beta to down markets versus the MSCI World of about 0.5 to 0.6, so a good sense of preserving capital when things become uncertain.
“I think the thing that’s most underappreciated about the infrastructure sector is the potential to grow beyond the income, beyond the inflation protection, and start to push into double-digit total returns over time. Right now, we’re seeing more growth than we ever have.”
The massive demand created by AI
“What’s been happening in tech is extraordinary – a trillion dollars of capital investment from big tech. That creates an interesting opportunity, but also a lot of risk around what the return on capital will be on that investment and what the future revenue models will be. There’s a lot of uncertainty.
“The difference with the regulated utility story is that we know what the returns are going to be.
“We know that an extra $3 billion CapEx programme to support a gigawatt-scale data centre with clean energy – wind, solar, batteries, a new transmission line, a new substation – all of that is signed off by the tech company, by the governor of the state, and by the regulator.
“So I have a high degree of certainty over the next five to 10 years of both capital investment and what the return on that investment will be.
“That’s the key distinction. If you invest directly in the tech side of AI, there’s enormous upside but also enormous uncertainty.
“With utilities, you’re effectively investing in the infrastructure that makes AI possible, but with regulated and far more predictable returns.
“That gives you a much clearer line of sight on earnings growth, which is a very attractive proposition from an infrastructure investor’s perspective.”
Backing railroads and airports
“A couple of areas we’re most excited about at the moment are freight railroads in the US. Beyond the AI data centre story, the other big theme playing out in the US is the onshoring of advanced manufacturing.
“With the Biden CHIPS Act and then Trump tariffs over recent years, there’s been a carrot-and-stick approach to bringing more manufacturing back to the US.
“Hundreds of billions of dollars have been invested in manufacturing semiconductors, wind turbines, solar panels, batteries and electric vehicles. That’s starting to push up industrial activity, which ultimately feeds into higher railroad volumes.
“Railroad volumes have been in decline, almost in an industrial recession, in recent years. We’re now starting to see that pick up from around minus 2% volume growth to plus 4% growth.
“There’s huge operating leverage with railroads. If they can add volume growth on top of ongoing price increases, operating efficiency and share buybacks, you start to get double-digit earnings per share growth.
“The second area of interest is airports. We’re long-term, fundamental and often contrarian investors. Through the Ukraine war and more recently the Iran war, airports took a hit due to uncertainty around travel and higher jet fuel prices.
“Some airport stocks were down 10% to 15% during the April/May volatility of 2026. We moved some of the portfolio out of energy midstream, which had done very well, into airports that had been hit. We’re confident those airports will recover nicely over a six to 12-month view.”
The best setup for infrastructure in years
“Historically, we looked for a 3% to 4% yield, and that’s very much intact today. I have a high degree of confidence in that being delivered. Historically, we’ve grown at 5% to 6% per annum. I think we’re seeing better growth now than at any point in the last 20 years.
“Because of US electric utilities, growth rates have moved up to 8%, even 10% per annum. The boring part of our portfolio is delivering above-normal growth. I think growth can surprise on the upside — it’s the best we’ve ever seen.
“Valuations also look very sensible, if not cheap in a few areas. So when you combine attractive income, improving growth and reasonable valuations, that’s a powerful setup.
“I think it’s also important to talk about risks. The two biggest risks in the sector are political or regulatory interference, and a sharp rise in real rates.
I feel like we’ve had a lot of political and regulatory interference over the last few years, so many of those risks are already reflected in prices. And on real rates, as we discussed, that risk is probably more behind us than in front of us.
“So yes, I feel very good about the forward outlook for listed infrastructure from here.”
Conclusion: Infrastructure remains a compelling asset class for long-term investors. While its defensive characteristics and inflation protection remain valuable, new structural growth drivers are creating opportunities rarely seen before.
It’s also an area of the market that can offer an appealing combination of income, growth and resilience.
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The writer’s views are their own and do not constitute financial advice.
This information should not be relied upon by retail clients or investment professionals. Reference to any particular investment does not constitute a recommendation to buy or sell the investment.
Main image: background round, alexander-grey-igBvG1AKTY8-unsplash
