Institutional infrastructure investing has entered a new phase of maturity, with allocation growth moderating, returns remaining consistent and global capital flows shifting, according to the 2026 Institutional Infrastructure Allocations Monitor released today by Hodes Weill & Associates and Cornell University’s Brooks Center for Infrastructure.
To download the full report, please visit: www.hodesweill.com/research.
For the first time since the survey’s inception, the report finds that more than half of institutional investors are at or above their target allocations to infrastructure, reflecting both successful portfolio buildout and constrained distributions across private markets portfolios. Further demonstrating this shift, the pace of allocation growth is moderating, with target allocations increasing to 6.2% in 2026, up 30 basis points year-over-year and 110 basis points cumulatively since 2023. Applied to an estimated global institutional asset base of approximately US$147 trillion, the increase in target allocations implies approximately US$441 billion of potential incremental infrastructure capital globally, underscoring the scale of institutional demand even as deployment becomes more measured.
“This year’s Allocations Monitor reflects a meaningful inflection point for infrastructure as an institutional asset class,” said Doug Weill, Managing Partner at Hodes Weill. “For the first time, a majority of investors report being at or above their target allocations, underscoring infrastructure’s evolution into a core component of institutional portfolios. Importantly, investor conviction continues to strengthen despite ongoing geopolitical and regulatory uncertainty, highlighting the sector’s defensive characteristics and its ability to provide resilient, long-term returns in today’s macroeconomic environment.”
Despite strong demand and a rising number of institutions meeting or exceeding their target allocations, the report highlights a continuing disconnect between investor appetite and deployment activity. Infrastructure portfolios remain under-allocated by an average of 106 basis points relative to target allocations, up slightly from 100 basis points last year. Slower exit and realization activity has constrained institutions’ ability to recycle capital, resulting in a more selective and disciplined approach to deployment favoring managers that have demonstrated a commitment to returning capital through exits and realizations.
At 9.1%, infrastructure returns were broadly in line with targets, marking a third consecutive year of strong performance, particularly relative to other alternative asset allocations. This stability against the backdrop of a volatile macroeconomic environment reinforces infrastructure’s role as a portfolio stabilizer. Returns have held within a narrow band of 8.8% to 9.2% across 2023 to 2025, underscoring the consistency that institutions increasingly value in the current environment.
Investor sentiment remains robust, with the Allocations Monitor’s conviction score rising to a four-year high of 7.3 out of 10. The increase appears to reflect growing confidence in infrastructure’s defensive characteristics, as well as the convergence of portfolios and target allocations and the continued alignment of returns with expectations.
Geopolitical risk remains the top concern for institutional investors, cited by 34% of respondents. Although this figure declined from 41% in 2025, it remains well above historical levels, with only 9% of respondents identifying geopolitical risk as their primary concern in 2024. Regulatory risk is also emerging as a more prominent factor amid evolving policy frameworks, permitting dynamics and infrastructure-related incentives, with 16% of respondents citing it as their top concern, up from 10% in 2025. At the same time, concerns surrounding interest rates and capital markets volatility have moderated, while apprehension over asset valuations has continued to decline, suggesting that institutions are becoming increasingly comfortable with current pricing levels.
The report also highlights a shift in sector preferences, with energy infrastructure overtaking digital infrastructure as the top area of focus. Approximately one-third of institutions plan to increase energy allocations, with appetite rotating from pure-play renewables toward sectors perceived as having more durable regulatory support, including utilities, transmission, grid infrastructure and storage. This does not, however, signal a divestment from renewables; rather, it reflects diversification across other critical energy sub-sectors.
At the same time, the growth of digital infrastructure remains closely tied to rising power demand, particularly as artificial intelligence and data center expansion drive increased investment in dedicated energy supply, cooling systems and grid capacity. This convergence is reshaping how institutions evaluate both sectors and expanding the addressable investment opportunity across infrastructure portfolios.
Turning to global capital flows, the report finds Europe surpassed North America as the leading preference for new allocations this year. Approximately 39% of investors plan to increase exposure to Europe, compared to 30% for North America, reflecting a combination of strong regional demand, structural investment opportunities and a pullback from U.S. exposure among certain European and Canadian investors.
As it relates to risk preferences, Core+ infrastructure has overtaken Value-Add as the favored strategy, completing a shift that has unfolded over the past two years, with 36% of respondents planning to increase Core+ allocations compared to 29% for Value-Add. At the same time, institutions are expanding the number of managers in their portfolios while remaining unlikely to allocate to first-time funds, reinforcing the continued dominance of established platforms.
Environmental, social and governance (ESG) considerations remain embedded within institutional investment processes, though the transatlantic gap continues to widen. In the U.S., 42% of institutions now rate ESG as “not at all important,” while no institutions in Europe reported holding that view. However, survey respondents and public commentary appear to suggest that some managers retain the same risk processes and personnel while publicly retreating from ESG and diversity, equity and inclusion messaging, presenting complications to LP diligence across all regions.
Dr. Rick Geddes, Founder and Academic Director of Cornell University’s Brooks Center for Infrastructure, said: “Infrastructure remains uniquely positioned at the intersection of long-term capital needs and global economic priorities. The sustained growth in institutional allocations reflects increasing confidence in the asset class’s ability to deliver resilient returns while supporting critical investments in energy, transportation, digital connectivity, and other essential systems. As demand for infrastructure investment continues to expand worldwide, institutional capital is likely to play an increasingly important role in meeting these needs.”
The 2026 Infrastructure Allocations Monitor is based on responses from 142 institutional investors across 26 countries, representing more than US$11.5 trillion in assets under management and approximately US$590 billion in infrastructure investments.
About Hodes Weill
Hodes Weill & Associates is a leading, global capital advisory firm focused on real estate, infrastructure and other real assets. The firm has offices in New York, Hong Kong, London, Amsterdam and Tokyo. Founded in 2009, Hodes Weill provides institutional capital raising for funds, transactions, co-investments and separate accounts; M&A, strategic and restructuring advisory services; and fairness and valuation analyses. Clients include investment and fund managers, institutional investors, lenders, and public and private owners of assets and portfolio companies. For more information, please visit www.hodesweill.com.
*All U.S. regulated capital market and securities advisory services are provided by Hodes Weill Securities, LLC, a registered broker-dealer with the SEC, and a member of FINRA and SIPC, and internationally, by non-U.S. Hodes Weill affiliates.
About Cornell University’s Brooks Center for Infrastructure
The mission of the Cornell Brooks Center for Infrastructure is to improve the delivery, maintenance, and operation of physical infrastructure. This is accomplished through dedicated teaching, research, and outreach efforts in infrastructure policy, with a key focus on infrastructure funding and financing. BCI maintains a network of scholars across multiple disciplines, both inside and outside Cornell, who share an interest in public policies impacting infrastructure delivery. BCI collaborates with partners in the public, private, and non-profit sectors to develop and disseminate research, develop new educational courses, share industry best practices, organize webinars, and host conferences about infrastructure policy.
Disclaimer
For informational purposes only. This is not a solicitation to buy or sell any securities or securities products. Please refer to the full report for important disclaimers. The full report can be found at www.hodesweill.com/research.
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