After a difficult period for infrastructure assets, 2025 has marked a more supportive environment. In this FundCalibre interview, Will Argent, manager of the TM Gravis UK Infrastructure Income fund, talks about what’s driving the recovery, from interest rate cuts and M&A activity to government infrastructure plans and regulatory developments. We discuss the role of renewables, utilities, digital and social infrastructure, and how diversification helps smooth returns across market cycles. He also explores how infrastructure income compares with equities and bonds, the importance of inflation linkage and what investors can realistically expect from the asset class looking ahead to 2026 and beyond.
Why you should listen to the interview: If you’re searching for reliable income with lower volatility than equities, this episode offers valuable perspective. Learn how infrastructure fits between bonds and equities, why yields remain attractive, how inflation linkage works in practice and what could drive both income and capital returns in the years ahead.
This interview was recorded on 16 December 2025. 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:
How 2025 has shaped up for infrastructure
“It has certainly been more favourable compared to recent years. I think that’s reflected most obviously in the positive performance year to date. I think in terms of the environment we’ve had a continuation of the rate cutting cycle, which has been helpful for listed infrastructure. Reference yields though, and by that I mean, government gilt yields have remained pretty stubborn. Sort of mid to longer dated reference yields are important for the long dated cash flows that infrastructure companies are exposed to. And as I say, those reference yields have remained a bit stubborn, which has been a bit of a frustration.
“Other sort of headwinds: I suppose, more recently we’ve had essentially regulatory overhangs on the renewable sector. We had the review of electricity market arrangements which was an ongoing consultation through much of this year. However, as soon as that consultation sort of moved away we have just been hit I suppose by a new consultation into the indexation framework for renewable obligation and feeding tariff subsidies that support renewables. So there’s an ongoing consultation now that may see some adjustment to the inflation metric that’s used to inflate those. So that’s a bit of a frustration but we should get some clarity on that in the near term.
“In terms of the sort of tailwinds I think we’ve certainly seen M&A appear in the listed infrastructure sector. We’ve seen takeovers of companies owned in the portfolio in the social infrastructure space.”
The 10-year infrastructure plan
“The government’s 10-year infrastructure plan is clearly supportive of private investment in essentially public assets, infrastructure assets. We’ve seen sort of a lot more discussion about the policy. And I think going into 2026, we’ll see that shift more towards actions and investment opportunities and the sort of frameworks that will underpin those opportunities.
“I think the infrastructure strategy, the 10-year infrastructure strategy indicates about 500 billion of private sector investment being required alongside about 750 billion in public sector money now. You know, we’ve seen some opportunities already come through and have been essentially seized upon by companies owned in the fund.
“So a good example would be International Public Partnerships, their investment in Sizewell C nuclear plant which is a fantastic investment opportunity for the private sector to invest in UK infrastructure. A very long dated infrastructure project in the UK. Elsewhere, in water the recent regulatory determinations sort of sets up a record level of capital expenditure over the next five year regulatory period. We have similar sizeable investment needs in the transmission energy transmission infrastructure in the UK. And again, we have lots of exposure to this theme in the fund.”
Balancing yield and growth
“So the income objective of the fund to me comes first and foremost. We are trying to deliver a 5% net income yield. We’re well ahead of that in terms of a trailing 12 month yield and have been in recent years. I think you know, essentially all components of the portfolio contribute to that income generation.
“So the portfolio is not if you like, split into income generators and essentially growth drivers. I’d like to think that that income as well as growth can come from pretty much every part of the portfolio. I think we’ve got companies that are performing well, there’s a momentum in their share prices, and those are delivering growth in terms of capital performance to the fund. And as those that sort of momentum peters out, which it always does, we’d look for other areas of the portfolio that have been perhaps unloved rated to be picking up. We see that kind of ebb and flow within the portfolio constantly.
“But I think when I think about the fund, I can’t identify a single position that we have in there that is really in there just for sort of capital upside growth dynamics, everything contributes in an income.”
Conclusion: Infrastructure continues to play an important role for income-focused investors, offering attractive yields, diversification and defensive characteristics. With regulatory clarity improving, private investment accelerating and interest rates easing, the outlook is more constructive than it has been for some time.
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