Finding Quality Niches for Infrastructure Investments

Why It Matters

These niche, renewable‑focused assets provide stable, long‑term cash flows, meeting pension‑fund return targets while supporting Europe's energy security and decarbonisation agenda.

Key Takeaways

• MPC Capital pursues majority ownership in renewable generation assets.
• Europe’s regulatory stability drives demand for private energy infrastructure.
• Partnerships span full value chain, from generation to grid services.
• Defence spending boosts port and maritime energy infrastructure projects.
• High interest rates prompt selective transaction strategy, emphasizing service revenue.

Pulse Analysis

Institutional investors, especially pension funds, are racing against a tightening supply of high‑quality infrastructure assets as governments accelerate decarbonisation targets. In Europe, the combination of ambitious renewable mandates, a backlog of grid upgrades, and a stable regulatory framework creates a fertile ground for private capital. Yet the surge in demand has driven up valuations, prompting managers to hunt for less‑crowded niches where they can secure long‑term cash flows without overpaying. Energy‑related projects—particularly those that integrate generation, storage, and grid services—have emerged as the most attractive segment.

MPC Capital leverages this environment by targeting majority stakes in on‑shore wind, solar PV and battery storage facilities, securing corporate off‑take agreements that lock in predictable revenue streams. The firm’s vertically integrated approach keeps it close to operational decisions, allowing active management that can enhance performance and mitigate risk. By partnering with industrial players when skill sets complement each other, MPC expands its reach across the entire energy‑infrastructure value chain, from generation to grid interconnection and ancillary services. Favorable policies in the UK and US, and calls for similar frameworks in Germany, further de‑risk these investments.

The strategic relevance of energy infrastructure extends beyond climate goals. Analysts warn that electricity supply could become the primary bottleneck for emerging technologies such as artificial intelligence, making reliable, flexible grids a catalyst for GDP growth. Simultaneously, NATO‑aligned nations are earmarking higher defence budgets for port expansions, which demand robust power and storage solutions—another tailwind for firms like MPC. While central banks gradually ease monetary policy, the firm remains cautious, preferring transactions that generate recurring service fees to cushion any residual interest‑rate volatility. This balanced model positions MPC to capture long‑term upside as Europe’s energy landscape evolves.

Finding quality niches for infrastructure investments

Image: Two business people overlooking a harbor that includes solar panels, battery storage, windmills, and electrical towers.

One of the fears of pension‑fund investment managers as they strive to deliver the UK government’s targets for investment into infrastructure and other large‑scale private assets is that quality assets will quickly be snapped up. Exploring niches offers a solution to that challenge.

Energy infrastructure provides one such opportunity, says Christian Schwenkenbecher, chief client officer of MPC Capital, which works with institutional investors to access structural growth opportunities in the maritime and energy‑infrastructure markets. With the growing importance of energy security within a more de‑centralised energy infrastructure, especially in Europe, there are some exciting prospects.

“Our approach to energy infrastructure investments focuses on generation assets such as onshore wind, solar PV as well as storage. We focus on structuring and securing long‑term cash flows primarily through corporate off‑take structures, allowing us to take an active role as a vertically integrated investor, ensuring we remain close to the underlying asset. Going forward we will be looking for additional niches across the entire value chain of energy infrastructure.”

This effectively gives the client a ringside seat, reassuringly close to the decision‑making centre of the firms they are investing in, a point underlined by Schwenkenbecher. “We look for majority ownership in assets to fully exploit our active management approach. However, we also see value in partnering when skill‑sets are complementary, and return and performance expectations are aligned. This means we have built a track record of working successfully for and alongside institutional investment partners but also industrial partners. Combining the two is a key ingredient for performance.”

Flexible system

The focus on Europe is driven by the quality of assets, reliable political and regulatory systems and the substantial investment backlog building a new, more flexible and de‑centralised energy‑infrastructure system. Schwenkenbecher continued: “The industrial sector in particular will increasingly depend on private capital to drive economically feasible decarbonisation. This is a compelling investment thesis for institutional investors, including private‑equity firms such as KKR, Apollo and EQT, which have stepped up their investment activity, particularly in Germany, Europe’s largest economy.”

“We will be looking for additional niches across the entire value chain of energy infrastructure.”

Schwenkenbecher explained that while MPC Capital’s target markets will remain unchanged, there is growing overseas interest from the US and the Middle East to invest in Europe. While this seems sensible given recent political events, he sees ample investment opportunities in Europe both in the short and medium‑to‑long term, across the entire value chain—from generation to grid infrastructure to energy services.

“Energy will likely be the key bottleneck for new, rising technologies such as AI and will continue to facilitate overall GDP growth and domestic competitiveness. Ahead of these mega‑trends and structural growth drivers it seems sensible to be invested along those structural trends,” he said.

While governments are looking to an expansion of nuclear power to play an important part in their longer‑term plans to create national greater energy security and capacity, it does not figure prominently in MPC Capital’s strategy. “We are agnostic to overall energy sources, but our focus on renewable production capacity is mostly due to its cost competitiveness and shorter time to market compared to nuclear power,” Schwenkenbecher continued.

Robust infrastructure

The current waves of geo‑political unrest sweeping around the world also create a neat intersection for MPC Capital’s core expertise in maritime and energy assets. With European governments—especially those within the NATO alliance—now committed to increasing defence spending to five percent of GDP in the next decade, he sees some of that funding directed toward major port expansions, all of which will need a robust energy infrastructure.

“Increased spending on port infrastructure and other maritime assets validates the importance of both sectors, and the focus on attractive niches is rather geared towards the intersection of maritime and energy infrastructure.”

These wider macro‑economic, geo‑political and regulatory issues are constantly on our radar screens, says Schwenkenbecher: “We have to be sensitive to the impact of interest‑rate developments on transaction as well as fundraising activity. This leads us to adopt a selective approach to overall transaction activity in a still high‑interest‑rate environment. We will be very cautious as central banks start to ease interest rates. If continued, this trend should act as a tailwind for our transaction activities.”

He emphasised the importance of balancing transactional and management revenues, noting that recurring service revenues have been a key reason for MPC Capital’s resilient business model. This has enabled the company to remain disciplined and focused on its investment strategies while ensuring high visibility of earnings growth.

Regulatory structures and policies are also a key influence when deciding which projects to commit capital to. The jolt to the world’s energy markets following the Russian invasion of Ukraine put national energy security firmly on government agendas. So far, the response in terms of impactful regulatory change has been mixed.

“The importance of sensible regulation to drive investment to accelerate the build‑out of energy infrastructure cannot be under‑estimated. In particular, the regulatory approaches in the UK and US have been very encouraging,” Schwenkenbecher said, while also expressing a desire for similar regulations to be enacted in Germany to attract more capital to the infrastructure sector. “Private capital will play a key role, with governments likely to provide frameworks to attract capital.”