Unlocking Value in Undervalued Infrastructure Assets: Navigating Post-2025 Market Dislocation and Policy Tailwinds

The post-2025 infrastructure landscape is a mosaic of opportunity and challenge, shaped by macroeconomic shifts, technological disruption, and policy-driven tailwinds. As global demand for resilient, sustainable infrastructure accelerates, investors are increasingly turning to this asset class for its dual promise of inflation hedging and long-term yield potential. Yet, beneath the surface of this growth narrative lies a market dislocation that creates fertile ground for value creation. This article dissects the forces at play-sector fundamentals, policy tailwinds, and discount-to-NAV dynamics-to identify where capital can be deployed with conviction.

Sector Fundamentals: A Tale of Two Trends

Infrastructure assets in 2025 are defined by a duality: robust demand for power and digital infrastructure juxtaposed with cautious capital allocation. According to a report by Roland Berger, the sector is projected to require $10–20 trillion in investments over the next decade, driven by AI-driven data center expansion, energy transition, and supply chain resilience. The U.S. and Europe have emerged as focal points, with the former witnessing a 33% year-over-year surge in digital infrastructure investments and the latter prioritizing energy independence.

However, valuation metrics reveal a nuanced picture. In Q3 2025, the mean EV/EBITDA multiple for infrastructure assets rose to 14.61x, reflecting a premium for quality assets in the private equity market. This increase contrasts with a decline in mean EBITDA to $15 million, suggesting a shift toward earlier-stage or turnaround opportunities. Leverage metrics also tell a story of balance: the median Debt to EBITDA ratio fell to 7.18x, while Debt to Equity climbed to 1.86x, indicating a strategic tilt toward aggressive capital structures amid tighter credit conditions.

Deal activity, though moderated by macroeconomic uncertainty, remains resilient. Renewable energy and digital infrastructure have seen 48% and 33% YoY growth in investments, respectively. This trend underscores a broader shift toward sectors with stable demand and domestic exposure, which insulate against external shocks like trade policy volatility.

Policy Tailwinds: From Permitting Reforms to Energy Transition

Post-2025 policy developments have further amplified the sector's appeal. The U.S. Infrastructure Investment and Jobs Act (IIJA), enacted in 2021, has catalyzed transportation capital investment, particularly in highways, though rail and public transit remain underfunded. Complementing this, bipartisan efforts to streamline permitting processes-such as the Permitting Working Group-aim to reduce project timelines and costs, fostering a more efficient development environment.

Globally, the energy transition has become a policy linchpin. For instance, California's clean energy reforms position utilities like Pacific Gas & Electric (PCG) to benefit from regulatory tailwinds. Similarly, the U.S. 2025 policy environment emphasizes grid stability and energy production, supporting both traditional and renewable energy sources. These policies not only de-risk long-term cash flows but also align with the sector's role as a hedge against inflation.

Discount-to-NAV Opportunities: A Market Correction in Progress

Infrastructure assets are currently trading at a significant discount to net asset value (NAV), presenting a compelling entry point. Global REITs, for example, are valued at a 10.5% discount to NAV in 2025, a stark deviation from their historical average of 4.0%. This dislocation is most pronounced in the office sector, where remote work trends and retrofitting costs have depressed valuations. Yet, subsectors like medical office buildings and amenitized traditional offices in strong submarkets show resilience.

The secondary market also reveals mixed signals. While 2024 saw record-breaking $162 billion in closed transactions, infrastructure fundraising hit a 10-year low, reflecting lingering liquidity constraints. NAV finance-a tool allowing managers to borrow against assets-has gained traction to address these gaps. However, the average market price for infrastructure funds remains at 75% of NAV, trailing buyout portfolios by 1900 basis points. This gap suggests undervaluation persists, particularly in high-quality, cash-flow durable assets.

Undervalued Subsectors: Where to Focus Capital

Several subsectors stand out as undervalued yet high-potential opportunities:
1. Utilities: Pacific Gas & Electric (PCG) and Enbridge (ENB) are positioned to capitalize on clean energy transitions and regulatory reforms.
2. Telecom: CommScope (COMM) benefits from 5G and broadband expansion, aligning with digital infrastructure megatrends.
3. Vertical Transportation: Otis Worldwide (OTIS) offers exposure to essential infrastructure with strong return on invested capital.

These subsectors are further bolstered by policy tailwinds. For example, the ASCE 2025 Infrastructure Report Card highlights a $9.1 trillion investment need between 2024 and 2033, with roads, energy, and schools as priority areas.

Conclusion: A Strategic Inflection Point

The post-2025 infrastructure market is at a strategic inflection point. While macroeconomic uncertainties persist, sector fundamentals, policy tailwinds, and discount-to-NAV opportunities collectively create a compelling case for long-term investment. By focusing on undervalued subsectors and leveraging policy-driven growth, investors can capitalize on market dislocation to secure durable, inflation-protected returns.