Investment of $6 trillion in European infrastructure proposed by DWS, with a focus on mid-cap strategy as essential for long-term durability
Private equity investment in European infrastructure is experiencing a significant surge in 2025, driven by a robust influx of capital and a strategic focus on key sectors such as energy transition, digital transformation, and mid-cap valuations.
This trend is underpinned by strong institutional investor interest, with 57% of Limited Partners (LPs) targeting developed Europe for infrastructure investments, making it the leading global destination for infrastructure allocations, surpassing North America.
The energy transition segment within infrastructure is particularly attractive, given its inflation correlation, secure income characteristics, and diversification benefits linked to energy prices. Europe and Asia are seen as the most compelling regions due to intensified government decarbonisation policies and commitments.
The European Investment Bank (EIB) Group is actively supporting infrastructure investments, having recently approved €15.5 billion for sectors including energy and business growth, emphasizing the green transition and corporate innovation.
Dry powder (capital ready for deployment) in global infrastructure funds is substantial, standing at around US$355 billion in 2025, with surveys indicating a planned 5-7% increase in allocations to the EU, further underpinning capital availability for mid-cap infrastructure deals.
Valuations in European infrastructure and related equities remain attractive, notably relative to the U.S. For example, U.S. investors are increasingly attracted to European infrastructure and energy transition assets as they offer similar sector exposure but with lower valuations and higher dividend yields.
The market has shifted more towards a buyer’s market since 2024, leading to a recalibration of expected equity returns and increased selectivity, particularly in energy transition infrastructure.
DWS, a leading investment firm, has taken a pan-European approach, with recent activity in Switzerland, France, and across the Mediterranean. The firm aims to acquire core-plus mid-cap assets and grow them into core assets suited for large-cap exits. DWS's infrastructure investment strategy focuses on the mid-cap segment, specifically equity tickets between €200m and €600m, targeting infrastructure assets valued below €1bn.
Infrastructure investment in Europe has a dual purpose: it promotes decarbonization and energy independence. Europe requires a $6 trillion investment in infrastructure by 2030, with $5 trillion allocated to energy transition and $1 trillion to digital transformation.
Harold d'Hauteville, Head of Infrastructure Equity Europe at DWS, emphasized the need for Europe to reduce its dependency on US tech, Asian manufacturing, and Russian gas imports. DWS has a complementary small-cap strategy focusing on early-stage sustainable infrastructure with the goal of growing into mid-cap core-plus at exit.
Public transportation tends to perform well in a time of low economic cycle. Typical holding periods are five to six years, targeting a two times multiple. Private capital is seen as a necessity, not just a contributor, for infrastructure investment in Europe. Infrastructure private equity is a subset of private equity, providing downside protection on the capital and resilience through recent macroeconomic changes.
Investing in European infrastructure can be a very attractive opportunity for investors, given Europe's cohesive and durable policy environment, contrasting with regions like the US where policy incentives are more volatile. Europe has incentives for renewable energy producers and objectives for consumers in terms of energy efficiency and share of renewables.
Sources: [1] European Investment Bank Group Approves €15.5 Billion for Sectors Including Energy and Business Growth (2021) [2] Infrastructure Investment: Europe Remains the Leading Global Destination for Allocations (2025) [3] Global Infrastructure Funds Hold Substantial Dry Powder (2025) [4] European Infrastructure and Energy Transition Assets Offer Attractive Valuations and Dividend Yields (2025) [5] Shift Towards a Buyer’s Market in Energy Transition Infrastructure (2026)
- The surge in private equity investment in European infrastructure in 2025 is primarily driven by a massive influx of capital and a strategic focus on sectors like energy transition, digital transformation, and mid-cap valuations.
- Europe is the leading global destination for infrastructure investments, with 57% of Limited Partners (LPs) targeting developed Europe, surpassing North America.
- The energy transition segment within infrastructure is particularly attractive due to its inflation correlation, secure income characteristics, and diversification benefits linked to energy prices.
- The European Investment Bank (EIB) Group recently approved €15.5 billion for sectors including energy and business growth, emphasizing the green transition and corporate innovation.
- Dry powder (capital ready for deployment) in global infrastructure funds is substantial, standing at around US$355 billion in 2025, with a planned 5-7% increase in allocations to the EU, further underpinning capital availability for mid-cap infrastructure deals.
- Europe requires a $6 trillion investment in infrastructure by 2030, with $5 trillion allocated to energy transition and $1 trillion to digital transformation.
- Infrastructure private equity is a subset of private equity, providing downside protection on capital and resilience through recent macroeconomic changes, making investing in European infrastructure an attractive opportunity given Europe's cohesive and durable policy environment compared to regions like the US.
