Europe faces $800bn annual infrastructure funding need, says KKR

Europe needs between $700bn and $800bn of infrastructure investment each year, almost double current spending levels, with private capital expected to play a growing role in closing the gap, KKR’s co-head of European infrastructure Vincent Policard has said, according to a report by Bloomberg.

Speaking to Bloomberg Television, Policard said the scale of the funding requirement would create a significant role for private capital as governments look to increase investment in strategic areas including energy, artificial intelligence and space infrastructure.

KKR raised more than $19bn for its latest infrastructure fund in August, its largest vehicle dedicated to the asset class to date, with a significant proportion of the capital expected to be deployed in Europe.

Policard said the UK remained an attractive market for infrastructure investors because of the stability of its legal framework, despite growing political debate around public ownership of essential infrastructure.

KKR last year withdrew a proposed £4bn investment in Thames Water, which is attempting to restructure almost £19bn of debt while creditors negotiate a rescue package with regulators.

He reportedly also pointed to KKR’s use of permanent and long-duration capital as an advantage in infrastructure investing. Around one-third of the firm’s infrastructure assets are held through open-ended vehicles, allowing KKR to retain investments for longer periods without being required to exit within a traditional closed-ended fund cycle.

The comments come as private markets firms continue to raise increasingly large pools of capital for infrastructure strategies, driven by investment requirements across energy transition, digital infrastructure and public utilities.

Earlier this week, Samsung Electronics and five affiliates agreed to invest $1bn in KKR-backed Helix Digital Infrastructure.