Infrastructure debt has gained attention as a private debt strategy. It merits this attention because an infrastructure debt strategy can be readily deployed and achieve attractive risk-adjusted returns in a market where value is difficult to find.

Low interest rates combined with strong demand for cash-yielding investments means value remains scarce. Infrastructure debt’s characteristics of high credit quality and a premium for illiquidity make it attractive, particularly to investors in established fixed-income investment-grade credit.

The 4 percent to 6 percent annual returns — once readily achievable from established sovereign, financial and corporate bond issuers — are no longer available. Today the returns from these established investments have in many cases halved to yield as little as 1 percent to 3 percent annually. Making matters more challenging, monetary policy continues to promote higher inflation relative to interest rat