Seeking robust, long-term cash flows in infrastructure debt
Our breadth of lending, origination capabilities and deep market relationships allow us to offer a range of senior debt investments. These are investment-grade and sub-investment-grade infrastructure projects across the UK, EEA and Canada in fixed-rate, floating-rate and inflation-linked formats. Our market positioning as the largest non-bank loan provider and bondholder in Europe and established reputation for delivery means we have sight of most of the opportunities in the European market and we can source transactions that the broader market does not always see.
Environmental, social and governance considerations – though non-binding – are integrated into our investment decisions and project monitoring.
Why invest?
Infrastructure debt investments have a low correlation to market cycles, matching long-dated assets and providing predictable income streams. Our investment philosophy is focused on managing the downside, given the asymmetric risk profile of debt investing. As such, we lend against core, essential assets with asset security. We place high value on financial covenants, and avoid highly subordinated debt positions. We also embrace newer sectors and structures that may offer ‘complexity’ or ‘novelty’ premia.
Robust cash flow profiles
Long-term debt is ideal to match long-dated liabilities and can provide predictable income from project cash flows.
Low default risk
Senior debt is prioritised in carefully structured transactions. Since we began investing in infrastructure debt we have not had a single payment default or any realised loss across the portfolio originated by Aviva Investors, which includes more than 270 transactions since inception of the activity in 1999 (as of September 2024).
Diversification
Private infrastructure debt has a low correlation to listed corporate bonds and is more resilient to market and credit cycles. This allows investors to access different sectors and types of revenue.
Illiquidity premium
Infrastructure debt typically delivers an illiquidity premium over listed credit.
Favourable solvency capital treatment
For insurers, the asset class receives favourable treatment under Solvency II, and other regulators are considering similar measures.
Key risks of infrastructure debt
Investment risk
The value of an investment and any income from it can go down as well as up and can fluctuate in response to changes in currency and exchange rates. Investors may not get back the original amount invested.
Illiquidity risk
Where funds are invested in infrastructure, investors may not be able to redeem when they want because infrastructure assets may not always be readily saleable. If this is the case, we may defer a redemption request.
Valuation risk
Certain assets could, by nature, be hard to value or to sell at a desired time or at a price considered to be fair (especially in large quantities), and as a result their prices could be very volatile.
Regulatory shifts
The frameworks for managing essential infrastructure services can change.
Investment insights
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Infrastructure debt team
Meet our infrastructure debt investment team.
Darryl Murphy
Managing Director, Infrastructure
Florent del Picchia
Head of Euro Infrastructure Debt
Explore
Private markets
As one of Europe’s largest private markets investment managers, we have the scale to access the full depth and breadth of private markets.
Infrastructure
Our deep market access allows us to source high-quality projects, delivered through a range of debt and equity opportunities. We focus on stable, long-term income generation and efficient execution.
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