Institutional investors are increasing allocations to infrastructure as deal size reaches new highs
NEW YORK / September 9, 2026 / — Infrastructure investing is back in the spotlight. Institutional investors are making fresh allocations to infrastructure megafunds and anchoring new infrastructure fund launches as the need for project finance grows. For many allocators, this trend is likely happening at just the right time. The story of the past few years has been institutions being overallocated to asset classes like private equity as a result of slow distributions and looking for diversifiers but often coming up short.
Now, as macroeconomic and geopolitical forces put pressure on everything from power transmission lines, power grids, roads, bridges, industrial sites and the global supply chain investors are finding many opportunities in infrastructure.
Perhaps the highest profile recent move in this domain has been CPPIB’s decision in August to deploy capital into infrastructure megafunds at KKR, Blackstone and BlackRock. These investments come alongside CPPIB’s already significant direct investment program in infrastructure. The pension already has $80 billion in net direct investment exposure to infrastructure deals, but will expand that through investments in megafunds in order to get a piece of even bigger infrastructure deals.
“Infrastructure deals are becoming increasingly large,” said James Bryce, head of infrastructure at CPPIB in a recent Financial Times interview. “As an investor with [a fund], are we able to open up for both of us deal opportunities that we may not have been able to chase on our own?”
Infrastructure deal size grows
CPPIB isn’t the only institutional allocator coming to the realization that infrastructure deals are big and only getting bigger. $200 billion was raised for infrastructure funds in 2025 according to McKinsey data and 2026 is on pace to at least meet if not beat that amount.
Much of this is driven by data center deals, which are closing in the tens of billions of dollars each. But markets are also seeing similarly sized deals crop up in energy transmission, power generation, and classic infrastructure like roads and bridges. So what’s driving this trend? Materials costs are up across the board, demand for new building is high globally and that’s adding to total project finance costs as projects compete for labor in addition to paying more for materials. Those realities mean projects need more financing from capital providers that take a long-term view and have the capacity to absorb the increased upfront costs.
Finding an advantage
In this competitive environment, institutional allocators are looking for ways to gain an advantage. CPPIB’s move into megafunds will mean they can make more investments and participate in bigger deals.
Others are choosing to anchor funds and define strategies. In August, CalSTRS announced it would be the anchor investor for a $2 billion dollar sustainable infrastructure fund to be launched by Nuveen. Nuveen’s Energy & Power Infrastructure Credit Fund II raised an additional $1.3 billion from an unidentified Canadian pension fund and TIAA, Nuveen’s parent company.
“The demand for new energy, power and digital infrastructure has never been greater,” said Don Dimitrievich, Nuveen’s global head of energy infrastructure credit, in a statement. “The rapid expansion of artificial intelligence, the onshoring of manufacturing and industrial supply chains and the broad electrification of the economy are collectively creating a generational need for new infrastructure investment. We believe private credit is uniquely positioned to play a leading role in financing that buildout while also achieving positive, sustainable outcomes.”
Infrastructure analysts expect these trends to continue. Technology companies say what they need in terms of data center support is going to be a multi-trillion dollar investment. That investment will need to come with additional investments in the global electrical grid and energy transmission pipeline in order to support that kind of energy demand without leaving everyone else literally sitting in the dark. Institutions that act early on these opportunities will have the most leverage when it comes to creating advantageous terms.