Listed infrastructure outlook for 2026

After several years in which listed infrastructure performance was shaped more by interest rates and sentiment rather than fundamentals, the investment backdrop is beginning to normalise. As we look ahead to 2026, the opportunity set is increasingly defined by asset quality, earnings visibility and the ability of infrastructure stocks to deploy capital into areas of genuine system need. For long-term investors like ourselves, this marks a welcome shift.

Demand for infrastructure across energy and power, digital networks, healthcare and essential services is not only persistent but accelerating. Importantly, this demand is increasingly being met with regulatory support, long-dated frameworks and clearer pathways to return on capital.

What is distinctive about the current environment is not simply the scale of investment required, but its urgency. Long run megatrends, such as electrification and digitalisation, are placing growing strain on existing systems, while a more volatile geopolitical backdrop is accelerating risks from years of underinvestment and forcing policymakers and regulators to act. In this context, infrastructure is a critical foundation in enabling economic productivity.

At the same time, we believe selectivity matters more than ever. Not all assets will benefit equally in their ability to attract capital and deliver durable returns, and some areas of the market remain vulnerable to speculative decisions or over-optimistic assumptions. The dispersion between high-quality, asset-backed infrastructure and more marginal projects is widening, creating both opportunity and risk for investors.

Key investment themes for 2026

Digital infrastructure: AI drives demand, but the opportunity is broader

AI remains an important driver of digital infrastructure demand, but its relevance for infrastructure investors lies in the physical systems required to support it rather than the technology narrative itself. Data growth, compute intensity and network traffic continue to underpin demand for digital infrastructure. 2026 will see the focus shift away from headline capacity expansion and towards asset quality, location and utilisation. Large, established data centre operators in established markets, with strong connectivity and diversified customer bases, are best positioned to benefit from AI alongside broader digitalisation trends, offering a more resilient earnings profile than narrow or speculative buildouts.

Stocks we like: Equinix and Digital Realty.

Power generation and storage: Urgency drives need for “All of the above”

Rising electricity demand, driven by widespread electrification, is placing immediate pressure on power systems. In this environment, there is no “silver bullet” to meeting demand growth while maintaining system stability. Renewables, gas and batteries all play a role in meeting near-term demand while maintaining system stability. Storage is increasingly central to decarbonising energy systems, enabling flexibility and supporting higher renewable penetration. We view the speed and scale of solar and battery storage technology to be a driving factor in deployment in 2026, with wind and gas playing a key role albeit on longer timescales. From an investment perspective, this favours platforms capable of deploying capital quickly across multiple technologies, rather than businesses reliant on a single, long-dated pathway.

Stocks we like: Grenergy and Brookfield Renewable

Transmission and grids: The utilities capex super-cycle continues

Grids remain the key constraint in matching power demand with supply. Years of underinvestment are now being reversed as regulators support large, multi-year capex programmes to modernise transmission networks. This is driven not only by decarbonisation goals, but the practical need to accommodate rising demand, improve resilience and connect new sources of supply. For high-quality utilities, this is translating into unprecedented visibility on capital deployment and allowed returns, supporting sustained, above-average earnings growth. Into 2026, regulated grid assets offer a rare combination of defensiveness, growth and earnings clarity.

Stocks we like: National Grid and Elia

Healthcare infrastructure: Momentum for earnings growth remains

Healthcare infrastructure is re-emerging as an attractive area of the market following a prolonged period of adjustment due to the pandemic. In the US, senior housing fundamentals are strong, as supply growth slows and demographic demand reasserts itself, creating scope for stand out earnings growth. In the UK, primary care assets such as GP surgeries continue to offer stable, asset-backed income supported by long-dated government contracts and limited new supply. Together, these segments highlight the appeal of healthcare infrastructure as a defensive allocation with improving fundamentals and genuine earnings growth rather than a purely yield-driven portfolio allocation.

Stocks we like: Chartwell Retirement Residences and Primary Health Properties

Rail infrastructure: Change may provide investment opportunity

Rail infrastructure continues to stand out as a critical, asset-backed component of national transport systems, supported by high barriers to entry, network scale advantages and durable pricing power. In North America, renewed focus on consolidation highlights the strategic value of large, integrated rail networks in driving efficiency, optimising capacity and improving service quality, although regulatory scrutiny remains an important consideration. Sustainability is an increasingly important part of the investment case, with rail offering a structurally lower-emissions alternative to road freight¹ and playing a growing role in supply chain resilience. Into 2026, we believe regulatory developments could act as a catalyst for a selective re-rating across the sector, with valuation support already evident in parts of the market and the potential for merger-related volatility to create attractive entry points elsewhere.

Stocks we like: Union Pacific and Canadian Pacific Kansas City

Water infrastructure: A reset in the investment case

Water infrastructure is entering a period of reset after years of underinvestment and regulatory strain, with frameworks increasingly geared towards supporting higher, multi-year capital expenditure focused on resilience, environmental compliance and network renewal. This is improving alignment between public policy objectives and the need for utilities to earn a reasonable return on capital, supporting better earnings visibility for well-positioned operators. Sustainability is central to this investment case, and it is something we see as a key driver of risk and ultimately an enabler of return. Effective delivery of environmental outcomes, water quality improvements and long-term asset stewardship is a prerequisite for regulatory support and value creation. In 2026, we see selective opportunities emerging where asset criticality, balance sheet strength and credible sustainability programs combine to offer improved risk-adjusted returns.

Stocks we like: Severn Trent and American Water Works

Foresight Capital Management portfolio positioning

Foresight Global Real Infrastructure Fund 

Entering 2026, the Foresight Global Real Infrastructure Fund remains structurally exposed to the key infrastructure themes we believe will drive long-term value creation. These include digitalisation and the modernisation of energy systems, which provide excellent growth opportunities, and the need for critical “everyday” infrastructure assets, which provide durable cash flows and defensiveness. This combination allows the portfolio to participate in structural growth while maintaining balance and resilience.

Over the past year, we have been actively refining portfolio construction to improve diversification, reduce concentration risk and raise overall liquidity, while remaining aligned with our long-term investment framework. In practice, this has involved moderating exposure to areas where correlations have increased and broadening the number of sectors within the Fund, whilst maintaining overall exposure to companies that can deliver strong shareholder returns over the medium to long-term. Notably, utilities have increased to ~20% of the portfolio, reflecting our conviction in the grid capex cycle and the visibility provided by regulated returns, while transport has also been increased to ~8% to broaden diversification through essential, asset-backed networks. Both have been achieved at valuations we view as attractive.

Digital infrastructure remains a core allocation but is now more balanced. We continue to favour data centre exposure, where demand drivers remain compelling, whilst taking a more balanced approach to towers despite attractive valuations. Elsewhere, we have reduced exposure to UK-listed investment trusts, improved portfolio liquidity through position-level changes, and, in January 2026, added selectively to water infrastructure with the initiation of American Water Works. Taken together, these changes position the Fund to capture long-term structural growth while improving risk-adjusted returns and preserving flexibility to respond to evolving opportunities through 2026 and beyond.

Foresight UK Infrastructure Income Fund 

The Foresight Infrastructure Income Fund remains well positioned to benefit from core growth themes in UK infrastructure, including the transition to low carbon energy systems, the modernisation of essential networks, and the upgrade of ageing critical assets. These trends continue to support long term earnings visibility, value creation, and contractual cash flows.

Throughout the past year, there has been a strong focus on evolving the Fund to broaden out the sector exposures further away from UK investment trusts towards increasing our allocation to high conviction UK utility names within the transmission grids and waste and water infrastructure asset sectors. 2025 also saw an exceptionally active year across the UK infrastructure regulatory landscape with multiple regulatory reviews creating a supportive risk and return environment for high quality regulated assets. 

The portfolio took advantage of these changes with the addition of Severn Trent, the UK’s largest listed pure‑play water utility, which stands to benefit from record investment in UK water networks driven by climate pressures, demographic trends and rising environmental standards, alongside improving regulated returns. As an environmental leader with effective monopoly positions, the stock offers compelling value in a sector underpinned by strong structural drivers and stable, regulated earnings. Similarly, energy transition assets continue to benefit from Ofgem’s RIIO-T3 determination, which reinforced record capex spend in grid expansion underwriting growth and earnings visibility for the transmission sector from 2026-2031. This saw the addition of SSE as a new holding in the portfolio whilst at the same time increasing our allocation to our existing National Grid position. These were funded from trimming some of our UK renewable infrastructure investment trusts which continue to offer attractive dividend yields but have relatively lower runway for growth.

Overall, we believe the Fund continues to provide a compelling opportunity for investors through an attractively valued portfolio, high and growing income and visible earnings growth through the cycle that underpins attractive total returns over the long-term.