As global asset owners are rapidly increasing allocations to infrastructure debt for its attractive, long-duration income and strong risk-adjusted returns, the influx of capital is exposing challenges in measuring risk in an illiquid and opaque market. This article, published on top1000funds.com on 19 December, 2025, suggests that more granular, project-level data and dynamic risk models are pulling infrastructure debt “out of the shadows”, enabling it to be assessed and managed as a mainstream credit asset rather than a homogeneous private niche.

“Most infrastructure credit is project finance and so assessed by ratings agencies. It pushes investors towards an imperfect workaround: taking a listed bond proxy and adding an illiquidity premium.

“There is no like-for-like listed market for infrastructure credit – you just don’t have public bonds formed from wind farms,” says Abhishek Gupta, head of product at Scientific Infra & Private Assets (SIPA), the commercial arm of the EDHEC Infrastructure & Private Assets Research Institute.

Investment grade infrastructure debt and corporate bonds have a long-term monthly return correlation of 0.8-0.9 given shared macro drivers such as interest rates and credit cycles, but there are also periods when their performance decouples. For example, in the non-investment-grade segment, the 12-month rolling return correlation between infrastructure debt and corporate bonds turned negative between mid-2018 and late-2021, illustrating periods of decoupled performance despite exposure to shared macroeconomic drivers.”

Read the full article here.