Today’s infrastructure investment is shaping tomorrow’s retirement realities, says Rhyadd Keaney-Watkin, managing director and head of ESG, Arjun Infrastructure Partners
In the changing investment landscape, infrastructure is emerging as a cornerstone of long-term asset allocation. It has not only proven its resilience through recent market events but is also uniquely positioned to enable societal transformation across energy, digital, transport and utility systems.
For pension schemes, particularly those looking at European private markets, this moment represents a powerful opportunity – not just to diversify, but to shape a future that delivers financial returns and real-world outcomes.
An integral part of a portfolio
Infrastructure offers more than portfolio diversification. When executed correctly, it can deliver equity-like returns with bond-like volatility – as well as the potential for long-term yield. Over the past decade, the asset class has been tested through pandemic paralysis, a European energy crisis and the end of a decades-long interest rate super-cycle. The results are clear: infrastructure has not just protected capital, it has grown it.
At Arjun, infrastructure is our sole focus. We manage €6.5 billion1 across core and core-plus European mid-market assets. Our investment approach builds on the defensive characteristics of infrastructure, delivering downside protection and diversification to our clients’ portfolios. This is achieved through identifying ‘real infrastructure’ assets – those that are essential, resilient and aligned to long-term themes creating significant capital needs. These include:
- Providing essential services such as water, energy, digital connectivity and transport
- High barriers to entry: providing competitive moats, which are often regulatory or structural in nature
- Contracted and inflation-linked cashflows, offering predictable long-term income
- A considered approach to leverage: using long-dated fixed-rate debt to enhance real returns in inflationary environments
Through these asset characteristics, which are tested through downside and sensitivity analysis during investment due diligence, we believe that thoughtfully executed strategies can provide downside protection and predictable long-term income streams. Upside opportunities such as capacity expansion or bolt-on acquisitions may provide further returns to investors.
Facilitating growth and transition
Governments across Europe are placing infrastructure at the heart of their growth and industrial strategies. Whether re-shoring energy production, electrifying transportation or upgrading digital networks, infrastructure underpins national objectives. Increasingly, pension capital is being seen not just as a provider of returns, but as a partner in delivering economic and societal progress.
At Arjun, we believe this dual role is a feature, not a trade-off.
Take the UK’s motorway service areas (MSAs). Welcome Break – an asset we have managed on behalf of pension clients since 2017 – might not be an obvious asset in the context of the net zero transition. Yet its 6,000 employees and national footprint offer a uniquely scalable solution to a growing problem: EV range anxiety. With over 300 high-speed chargers already deployed and more to come, Welcome Break is helping to decarbonise transport while future-proofing its revenue. And through Covid-19 and beyond, its robust earnings and defensive qualities have underpinned strong performance.
Assets aligned with the net zero transition, digital transformation and energy security are not only impact-aligned – they are growth-aligned.
Rhyadd Keaney-Watkin
Net zero: risk and opportunity
The journey to net zero is not only an investment opportunity – it’s a material risk that must be actively managed across infrastructure portfolios.
At Arjun, we’ve developed a bottom-up asset management initiative to drive net zero alignment, tailored to the complexities of each asset type. This includes:
- Board-level commitments to net zero by 2050, now in place across 100% of our fund assets
- Science-Based Targets (SBTi)2 to define asset-level decarbonisation pathways, with half our fund assets publicly committed
- Robust transition plans, integrated into business plans and capex budgeting, to operationalise targets
This methodology was recognised in 2024 by the Institutional Investors Group on Climate Change (IIGCC) as a best practice case study for private market infrastructure.
Real-world impact and value creation
Our investment thesis is clear: assets aligned with the net zero transition, digital transformation and energy security are not only impact-aligned – they are growth-aligned. We see this in:
- Renewables, with significant renewable energy generation and a focus on energy independence across Europe
- Digital infrastructure, enabling smart cities, IoT and next-generation connectivity
- Utilities, where resilience and sustainability upgrades are essential to meet future demand, as well as deliver resilience through rapidly changing climate conditions.
Our approach is not to passively hold assets, but to actively manage them – often through controlling or co-controlling positions – and deliver value-accretive improvements over the investment’s life.
Purpose-built for pension capital
As Arjun marks its tenth year, our conviction in long-term, responsible investment has only deepened. Looking forward, we see infrastructure not just as a financial allocation, but as a platform for tangible, sustainable impacts. For pension schemes seeking resilient returns, inflation protection, and long-term value aligned with societal needs, infrastructure presents a timely and compelling opportunity.
1 AuM includes invested and committed capital, as at March 2025