Private Credit

Infrastructure in 2020’s

May 2023 – 4 min read

Orhan Sarayli, Head of North America for Barings’ Global Infrastructure Group, spoke with Institutional Real Estate, Inc.'s Real Assets Adviser about the increasing appeal of infrastructure debt investing given its resilience through economic cycles.

Infrastructure Debt Funds

Infrastructure investing through the debt side is increasingly appealing, says Sarayli of Barings.

“We believe the private infrastructure debt market provides attractive attributes, namely (a) all of the positive attributes associated with infrastructure investing; (b) a continuous flow of opportunities, that is debt is being issued steadily; (c) generally secured positions in the capital structure that are senior to equity; and (d) relatively attractive returns that, in many cases, provides a better cash yield to investors than might be expected within a given time frame."

In August of 2022, Barings closed its Inaugural Target Yield Infrastructure Debt Strategy Fund with a $630 million capital raise, which expanded Barings’ global infrastructure platform to more than $14.3 billion in assets under management. The fund will invest in below-investment-grade debt in Europe and North America, and will largely serve institutional clients such as pension funds and insurance companies. As might be expected with government-backed enterprises, default rates on infrastructure debt are relatively low, especially in developed nations.

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Orhan Sarayli

Head of North America, Global Infrastructure

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