IFM Investors' chief strategy officer Luba Nikulina outlines how the infrastructure asset class is evolving through what she calls the five Ds: decarbonisation, digitalisation, demographic change, de-leveraging public finances and deglobalisation. Speaking in a sponsored article for Infrastructure Investor, Nikulina explains how infrastructure investing has expanded beyond traditional transportation and utilities to encompass renewable energy, data centers, and even defense assets.

As the definition of infrastructure broadens, so do the financial characteristics and return expectations. Nikulina notes that infrastructure equity return expectations have risen by approximately 200 basis points to 13.4 percent, approaching private equity levels, while infrastructure debt expectations have climbed to 9.6 percent. This shift reflects investors' growing appetite for both stability and growth potential in an asset class that has demonstrated resilience through recent market volatility, including higher inflation and rising interest rates.

The expansion creates both opportunities and challenges for infrastructure managers. With McKinsey estimating $106 trillion in infrastructure investment needed by 2040, competition for deals is intensifying. Nikulina emphasizes that successful managers must build scale and specialized capabilities to compete effectively, whether targeting traditional regulated utilities or higher-growth opportunistic infrastructure projects.