Manulife is acquiring infrastructure collateralized loan obligations (CLOs) and secondaries assets to address low distributed-to-paid-in capital (DPI) ratios within its fund portfolio, according to Kate Roscoe, head of infrastructure fund investments at the Canadian insurer. The move aligns with growing retail inflows into infrastructure assets, which are creating new exit opportunities but also introducing volatility, Roscoe noted in an interview with Secondaries Investor. Cdn$1.2bn in retail capital has entered the infrastructure space this year, prompting funds to explore alternative liquidity solutions, she added.**

Retail investors’ surge into infrastructure has intensified competition for assets, squeezing traditional fund strategies. While secondaries markets offer faster exits, they carry risks like price compression and illiquidity during market stress, Roscoe warned. Manulife’s strategy reflects a broader industry shift as funds balance investor demand for returns with the need to maintain capital flexibility. The firm’s focus on CVs and secondaries underscores the growing role of distressed and secondary infrastructure assets in portfolio management.**

The trend highlights challenges for infrastructure funds reliant on long-term capital commitments. Retail inflows, while beneficial for liquidity, have disrupted pricing dynamics, forcing managers to reassess valuation models. Manulife’s acquisitions may signal confidence in near-term recovery of distressed assets, though risks remain if retail demand wanes. For investors, this shift emphasizes the importance of monitoring secondary market activity as a barometer for broader fund health.**

This development could reshape how infrastructure capital is deployed. By prioritizing CVs and secondaries, Manulife aims to optimize DPI while navigating market uncertainties. The move may also pressure peers to adopt similar tactics, potentially accelerating consolidation in the sector. Investors should track how retail flows evolve alongside these strategic pivots to gauge long-term implications for fund performance.