Infrastructure Secondaries: The $25B Market Accredited Investors Are Overlooking

TL;DR: Infrastructure secondary deal volume hit $25 billion in 2025, more than doubling from $11 billion in 2023. Buyers acquire existing stakes in private infrastructure funds at discounts to net asset value, pairing defensive, inflation-linked cash flows with below-market entry prices. Dedicated fund managers including Ares, Igneo, Pantheon, and Hamilton Lane have raised record capital to pursue this deal flow. Most accredited investors have no exposure to the asset class, and that gap is getting harder to justify.

In October 2025, Ares Management announced it had raised $5.3 billion for its infrastructure secondaries strategy — three times the size of its 2021 predecessor fund. That single fundraise was larger than the entire infrastructure secondary market just a few years earlier. It was a signal, not an outlier.

Infrastructure Secondaries Defined

Primary infrastructure investing means committing capital to a fund at its launch. The fund then acquires assets: toll roads, pipelines, data centers, wind farms, power grids. Investors wait a decade or more for those assets to be sold and capital returned.

Infrastructure secondaries are different. A secondary buyer purchases an existing limited partner (LP) stake in one of those already-running funds. The assets are already built and operating. The fund is already partway through its life. The buyer is acquiring cash flows that have already started, not waiting for construction or commissioning.

This differs meaningfully from private equity secondaries. PE secondaries involve companies whose values are tied to earnings growth, credit cycles, and exit multiples. Infrastructure assets (airports, transmission lines, regulated utilities) generate revenue under long-term contracts or regulated rate structures. That revenue is frequently indexed to inflation. Cash flows are predictable in a way that most private equity cannot claim.

Infrastructure secondaries transactions take two primary forms. In LP-led deals, an existing fund investor sells its stake, typically to raise liquidity or rebalance a portfolio. In GP-led continuation vehicles, a fund manager creates a new vehicle to hold a specific asset or set of assets beyond the original fund's term. Both deal types offer secondary buyers the same core opportunity: purchasing seasoned, cash-generating assets without paying a new-fund premium.

Why the Market Doubled to $25B

Infrastructure secondary deal volume reached $25 billion in 2025, up from $11 billion in 2023, according to PJT Partners data cited by PitchBook via Yahoo Finance. Jefferies projects the figure reaches $30 billion in 2026, and PJT Partners forecasts the market approaches $45 billion by 2030.

Three forces drove the doubling.

First, primary infrastructure fundraising surged through 2019 to 2022. Brookfield Infrastructure, Macquarie Asset Management, and dozens of other managers raised enormous vehicles during that period. Those funds are now mid-life. LPs locked into 12-to-15-year fund structures are seeking early exits. Endowments, pension funds, and sovereign wealth vehicles that over-allocated to infrastructure in the low-rate era are rebalancing. That creates supply.

Second, the energy transition and AI infrastructure buildout are generating a new category of GP-led deal flow. Data center operators, transmission developers, and renewable energy platforms require capital beyond original fund timelines. Campbell Lutyens reported that GP-led infrastructure deal volume reached $5.7 billion in the first half of 2025 alone, putting full-year 2025 on pace to exceed 2024's record $11.4 billion GP-led total. These continuation vehicles let managers hold trophy assets (hyperscale data centers, offshore wind portfolios, fiber networks) rather than selling them at the end of an original fund's term.

Third, there is a supply-demand imbalance that still favors buyers. Only approximately $14 billion in dedicated infrastructure secondary dry powder faces annual deal volume of $25 billion or more. By Jefferies' 2.5-to-3x equilibrium standard, the market remains undersupplied with capital relative to deal flow. Sellers still must compete for buyers' attention.

The Return Profile: Discounts Plus Defensive Cash Flows

The return case for infrastructure secondaries rests on two independent sources of value, not one.

The first is the NAV discount. Net asset value (NAV) is the fund manager's appraised value of its holdings. When an LP needs liquidity, it often sells its stake below that appraised value. The buyer pays less than what the underlying assets are formally worth. Campbell Lutyens' 2025 data shows that LP-led infrastructure secondaries typically trade at 6 to 8 percent discounts to NAV. Distressed LP sales can reach discounts of 30 to 40 percent. GP-led continuation vehicles generally clear near 95 to 96 percent of NAV, a tighter discount, but paired with curated, high-conviction assets the manager has specifically chosen to hold.

The second source of value is the underlying asset quality. Infrastructure assets generate contractual or regulated revenue. Toll roads collect fees indexed to GDP and inflation. Transmission grids operate under regulated rate bases. Renewable energy installations sell power under 15-to-25-year power purchase agreements. An investor who buys a stake in a fund holding these assets at a 10 percent discount to NAV gets both the inflation linkage and the entry advantage.

Pantheon's infrastructure secondaries platform reported a realized net IRR of 15 percent and a TVPI of 1.7x as of September 30, 2025. Target net IRR across the buyer universe now sits in the mid-teens. A Jefferies survey found approximately 36 percent of buyers target 12 to 15 percent net IRR, with another 25 percent targeting 10 to 13 percent. Those are returns meaningfully above infrastructure primary funds, which typically target 8 to 12 percent net IRR, achieved with less blind-pool risk because the assets already exist.

Key Buyers and Recent Fund Closes

The infrastructure secondaries market has a defined set of institutional players. Allianz Global Investors has highlighted the firm's own positioning alongside a small group of dedicated specialists.

Manager	Key Vehicle / Strategy	AUM / Notable Raise	Focus
Ares Management	Ares Secondaries Infrastructure Solutions III (ASIS III)	$5.3B raised (strategy total, Oct 2025); $3.3B for ASIS III alone	LP-led and GP-led; North America, Europe
Igneo Infrastructure Partners	Dedicated infrastructure secondaries	$2B+ AUM in infrastructure secondaries	Core and core-plus infrastructure secondaries globally
Pantheon	Pantheon Global Infrastructure Secondaries (PGIS)	Multi-vintage; 15% realized net IRR, 1.7x TVPI (Sep 2025)	Diversified LP-led and GP-led; global
Hamilton Lane	Infrastructure Secondaries Co-Investment	Part of $120B+ AUM platform	GP-led continuation vehicles; energy transition focus
Brookfield Infrastructure	Secondary buyer / continuation vehicle sponsor	$100B+ infrastructure AUM globally	Primarily sponsor of GP-led vehicles for own assets
StepStone Group	Infrastructure secondaries within broader alternatives platform	$65B+ AUM across real assets and secondaries	Co-invest and LP-led; energy and transportation
Ardian	Ardian Infrastructure Secondaries	Part of $170B+ AUM platform	European infrastructure focus; LP-led and GP-led

Global infrastructure secondary fundraising hit a record $11.5 billion in 2025, more than doubling 2024's $5.6 billion, according to StepStone Group's fundamentals paper. Ares' raise alone represented nearly half of that annual total.

Why Most Accredited Investors Are Underallocated

Institutional investors (pension funds, sovereign wealth funds, large endowments) have allocated to infrastructure primaries for two decades. But they have generally been late to the secondary market. And accredited individual investors, who qualify by meeting SEC income or net worth thresholds, have been almost entirely absent.

There are structural reasons. Infrastructure secondary funds historically set minimum commitments of $5 to $25 million, targeting institutional capital only. The deals are complex: valuing a partial stake in a 40-asset infrastructure fund requires sector-specific expertise most wealth managers do not maintain. And unlike public infrastructure stocks, which trade at premiums to asset value, private secondary stakes are not visible on a brokerage statement.

That access barrier is eroding. Interval funds, tender offer funds, and feeder vehicles from managers including Hamilton Lane and Pantheon now offer qualified purchasers and accredited investors access at minimums of $25,000 to $100,000. These vehicles create quarterly or semi-annual liquidity windows rather than the 10-to-12-year lockups of institutional funds. They carry higher fees than direct institutional access, but they open a market previously closed to private wealth entirely.

The allocation gap matters because infrastructure secondaries offer something most accredited investor portfolios lack: inflation-protected, contractual cash flow combined with a structural price discount. Stocks and bonds do not provide the NAV discount. Real estate secondaries exist but remain smaller and less developed. Infrastructure secondaries occupy a specific return niche (mid-teens IRR from assets that would be unremarkable to own at full price) that has no close substitute in public markets.

Consider what the asset class looks like from a portfolio construction standpoint. Public equities and fixed income are correlated to interest rate cycles. Real estate carries debt concentration risk. Infrastructure secondaries, by contrast, derive returns from contracts: a regulated electricity distributor that earns a set return on its asset base regardless of equity market conditions, or a toll road whose revenues are contractually indexed to the consumer price index. Adding that income stream to a diversified portfolio reduces overall correlation to public market swings. That is the same logic that has driven pension funds to infrastructure primaries for 20 years. The secondary market just adds the discount.

The timing argument is straightforward. Supply is outpacing dedicated capital right now. The window where buyers can price deals at 10 to 30 percent discounts will compress as more capital enters. PJT Partners forecasts the market nearly doubles again by 2030. Investors who wait for the market to be fully institutionalized will access it at tighter discounts and lower expected returns.

Risks: Illiquidity and Complex Valuation

Infrastructure secondaries carry real risks. Illiquidity is the primary one. Even funds structured with periodic liquidity windows can suspend redemptions during market stress. The underlying assets (pipelines, airports, regulated utilities) cannot be sold quickly. An investor who needs capital at a specific time may find that a secondary fund does not accommodate that need. This is not a public market instrument with intraday trading.

Valuation risk is the second concern. NAV is an appraisal, not a market price. Infrastructure assets are valued using discounted cash flow models with long time horizons. Appraisers must project regulatory environments, technology disruption (grid storage undercutting a peaker plant, for example), and inflation assumptions decades into the future. A fund reporting a 5 percent discount to NAV might imply that NAV is accurate. It may not be. The buyer has limited ability to verify that independently without deep sector expertise.

Manager selection risk is significant in a market this concentrated. A handful of specialists dominate. Poor underwriting, specifically overpaying for a GP-led continuation vehicle housing assets the original GP could not sell elsewhere, destroys the discount advantage entirely. Due diligence on deal flow, appraisal methodology, and alignment of interest between the GP and secondary buyers is non-negotiable.

Currency and geographic risk apply in cross-border deals. Many of the largest infrastructure assets are in Europe and Australia. A U.S.-dollar investor buying a Euro-denominated stake in a European toll road takes on FX exposure that can erode returns materially.

None of these risks is disqualifying. They are, however, reasons why direct institutional access or a manager with genuine infrastructure secondary expertise operating a fund accessible to accredited investors is preferable to improvised exposure through generalist alternatives platforms.

Author Disclosure: Jeff Barnes, MBA has no personal position in any company, fund, or platform named in this article. Angel Investors Network has no current commercial relationship with any party mentioned. AIN provides marketing and education services, not investment advice. Past performance does not guarantee future results. All investments involve risk, including loss of principal.