Real Assets | Investment Insight
March 01, 2023
Infrastructure Investing: Embracing Complexity in Times of Structural Change
After a tumultuous 2022, the US economic outlook for 2023 remains cloudy. Renewed uncertainty about inflation and the Fed means markets will continue to be volatile. With that in mind, we believe that infrastructure can offer key attributes—downside protection, low correlation to markets, potential protection against inflation—for investors deploying capital today.
We believe that a nuanced infrastructure investment strategy with a disciplined, price-conscious investing mindset—purchase price matters—is more crucial than ever. We see the middle-market as the most fertile ground for opportunity, especially at a time when the large capitalization space is awash in capital.
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Apollo believes Investment Grade Private has the potential to generate attractive risk-adjusted returns but has been overlooked because it doesn’t fit neatly into the current asset allocation framework.
Market participants often ask why large corporate borrowers would choose a private solution for financing rather than the public markets, especially in the current environment. In this paper, we answer that question and explore the lasting power of private credit, the landscape of the debt markets, potential opportunities, and pitfalls to avoid.
The US economy remains strong with no signs of a major slowdown going into 2025. We see interest rates staying higher for longer on a relative basis (regardless of the Fed’s easing campaign) as inflation remains above target, employment strong, and spending robust.
