Despite economic and geopolitical uncertainty, US infrastructure dealmaking has boomed as investors seek the stable, long-term revenue streams and predictable returns that infrastructure assets provide
Long-term revenue streams and steady yields have seen dealmakers flock to US infrastructure assets as an antidote to volatility through the first half of 2025.
US M&A infrastructure deal value reached US$136.6 billion in H1 2025, already ahead of the full-year total posted in 2024 (US$125 billion) and nearly eclipsing 2023’s annual output (US$137.2 billion). At the time of writing (September 2), 2025’s year-to-date total stood at US$179 billion.
Against a backdrop of tariff volatility and geopolitical uncertainty, US infrastructure has been a stable, go-to option for asset managers who are wary of risk, but who are mandated to deploy large amounts of dry powder.
Deal activity has also benefitted from deepening partnerships between infrastructure funds and strategic operators, which are investing together through joint ventures and minority deals to pool resources and finance ever-larger infrastructure projects.
Apollo, for example, partnered with Intel to jointly fund the Fab 34 semiconductor fabrication facility in Ireland, investing US$11 billion for a 49 percent stake in the project, while Blackstone led a US$7 billion investment in a subsidiary that will hold a portion of Rogers Communications’ wireless backhaul transport infrastructure.
Structured equity deals
Infrastructure investors have also put increasingly complex and bespoke deal structures in place to manage their risk exposure. Structured equity deals, for example, allow dealmakers to stay within their risk parameters and have become more prevalent. Blackstone’s investment in Rogers and Apollo’s partnership with Intel are both recent examples of leading asset managers providing flexible and efficient capital solutions to strategic operators. Additionally, Brookfield recently closed a US$1 billion fund that will make minority and structured equity investments in middle-market infrastructure assets.
Structured equity deals are being used in a variety of contexts, from financing greenfield construction to de-leveraging strategic balance sheets. The structures exhibit equity characteristics, as they offer infrastructure firms and projects with a source of capital that rating agencies treat as equity, meaning it doesn’t impact borrowing costs or credit rankings. For investors, however, structured equity presents a risk and return profile similar to debt and offers more downside protection than traditional equity.
Increased adoption of structured equity has helped channel more cash into the infrastructure space through a cycle of higher interest rates.
Hidden headwinds
Strong H1 figures and new deal structures increasing capital flows, however, do not mean that infrastructure is immune to the tariff and political volatility that has slowed the wider US M&A market.
US infrastructure may look strong relative to M&A in other sectors, but deal flow has skewed to infrastructure subsectors benefitting from an AI boom that has boosted deal flow involving data centers and the infrastructure required to operate them.
Together, power and telecom deals accounted for more than 65 percent of total US infrastructure deal value in H1 2025, with seven of the ten largest deals coming from these two verticals. This trend continued in Q3, with the power and telecom subsectors generating four of the five largest deals announced by the time of writing (September 2). The boom in AI-linked infrastructure is propping up a market where investing in other assets has been more challenging.
US port assets, for example, have experienced significant volatility this year, with container traffic fluctuating from month to month as tariff policies have continued to shift. Investors are bracing for an uncertain future as import volumes show signs of decline as businesses and consumers adapt to higher tariffs.
The new administration’s change of direction in renewables policy has proven similarly challenging. M&A value in the subsector actually increased by 64 percent year on year in H1, despite volume rising by only 7.7 percent, but the One Big Beautiful Bill Act passed in July creates hurdles for a sector that benefited from significant support under the previous administration. By September 2, the aggregate, year-to-date value of renewables deals stood at US$14.8 billion, though deal volume has trended down through consecutive quarters.
Tax credits for solar and wind power will be phased out by 2027-2028, electric vehicle tax credits halt this September, and community solar and wind projects will be impacted as energy-transition grants are rescinded.
There could be an initial surge in investment as investors and operators race to build solar and wind infrastructure before the tax credits deadline, but the long-term outlook isn’t clear enough for those looking to deploy capital in stable assets with long-term investment horizons.
Capital-intensive core infrastructure investment on the backburner
Wider market uncertainty around inflation and interest rates have also indirectly affected traditional core infrastructure assets, where vast sums of upfront capital expenditure are needed to maintain existing assets and expand capacity to service growing, increasingly urban populations.
The gap between current levels of investment and what is required for core infrastructure to sustain future demand is widening, as investors step back from sinking large amounts of capital into projects when valuations and the projected cost of capital are unclear.
A more predictable macroeconomic setting would help unlock investment in these underserved segments, further boosting infrastructure M&A. Consolidating the US’s highly fragmented water and sanitation systems, building out flood-defense infrastructure and expanding fiber broadband access to rural communities, for example, are all areas that offer significant investment opportunities, but investors appear to be waiting for greater market stability.
New opportunities
Infrastructure dealmakers will be aware that, while investing in some segments has become more complex under the new administration, opportunities in other areas have opened up.
The One Big Beautiful Bill Act, for example, has made more federal land available for oil and gas exploration and lowered drilling costs, which could spur energy-related infrastructure investment. The act also provides US$12.5 billion in funding to modernize the US’s air traffic control system infrastructure.
These policy shifts, combined with the ongoing growth in data centers, provide a firm foundation for sustained, high levels of M&A activity in US infrastructure.
Meanwhile, the joint venture and structured equity strategies that have become more prevalent are likely to continue their growth as strategic buyers and private infrastructure dealmakers invest in different parts of the capital structure and partner up to share and protect against downside risk.
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