BackBy Adrian Pawelec, Partner and Head of Legal at Marguerite
Looking ahead to 2026, which trends from 2025 do you expect to persist in the infrastructure fund market?
Several structural trends are clearly carrying over into 2026 and beyond. The infrastructure fund market is becoming more complex on both the fundraising and investment sides.
On fundraising, managers are responding to a more challenging environment by consolidating platforms and expanding distribution channels, particularly towards semi-professional and retail investors. On the investment side, higher interest rates continue to influence pipeline and exit processes. That said, the impact is likely to be less pronounced than in private equity, given the different risk profiles and cash-flow characteristics of mature infrastructure assets.
These are long-term dynamics that market participants are already familiar with, and they will remain relevant in 2026. But beyond these well-known factors, there are two more recent developments that could materially reshape the market.
One of those developments relates to European regulation. Why is the Draghi Report so central to the discussion?
At its core, the Draghi Report raises a fundamental question: whether, how, and how quickly the EU will take practical steps to allow European financial institutions – notably pension funds and insurers – to deploy more capital into private equity and infrastructure.
The report on The Future of European Competitiveness argues that Europe is failing to channel its savings efficiently into productive investments. EU households generate ample savings – EUR 1,390 billion in 2022, compared with EUR 840 billion in the US – but that capital is not being deployed effectively into the real economy.
The report attributes this in part to market fragmentation and an excessive reliance on bank financing. It highlights the role that private equity and long-term investment funds could play in financing innovation, infrastructure, and economic modernisation across Europe.
How does the report link underinvestment to the structure of European capital markets?
A crucial point in the report is that Europe’s challenge is not a lack of capital, but rather how that capital is deployed. US private equity markets are far more developed, not because US households are wealthier, but because capital is channelled more efficiently into the economy.
European capital markets, by contrast, are undersupplied with long-term capital, largely due to the underdevelopment of pension funds. This lack of depth reduces liquidity and makes European markets less attractive – ironically encouraging European institutions to invest in the US instead.
What needs to happen between now and 2026 for this to change in practice?
What really matters for 2026 is not the publication of the Draghi Report itself – that happened in September 2024 – but whether EU institutions and member states translate its recommendations into action.
There are several complementary policy measures that could incentivise European financial institutions to increase allocations to private equity and infrastructure as part of balanced portfolios. Even relatively modest changes could have an impact. For example, broader regulatory acceptance of the “look-through” or “mandate-based” approaches – rather than the standard fall-back approach – could lower capital charges and make infrastructure funds more attractive.
However, truly transformative change will require amendments to EU-level and national legislation, which ultimately depends on political will.
Are there any concrete signs that progress is being made?
Yes, there are encouraging signs. The European Insurance and Occupational Pensions Authority has launched consultations on potential changes to Solvency II. The European Commission has also completed consultations on the treatment of equity exposures under the Capital Requirements Regulation.
At the national level, some member states are becoming more proactive. Poland, for instance, has launched the InnovatePL programme, inspired by France’s Tibi plan, with the aim of strengthening its investment fund ecosystem.
These initiatives are complex and will take time to mature, but by 2026, we may well see more European pension funds and insurance companies increasing their allocations to European infrastructure assets.
Your second major theme concerns Central and Eastern Europe. Why does this region stand out today?
The economic performance of Central and Eastern European (CEE) countries since EU accession has been remarkable. Poland’s GDP per capita tripled between 2002 and 2022, and the country is now the world’s 20th-largest economy. Other countries in the region – including Slovakia, Lithuania, the Czech Republic, Latvia, Estonia, Hungary and Slovenia – have also posted strong growth.
This success is mirrored in private equity and infrastructure activity. According to Invest Europe, private equity investment in CEE reached EUR 2.83 billion in 2024, up 50% year-on-year, while exits rose 33% to EUR 1.35 billion – the highest level since 2020.
Given that momentum, what still surprises you about the region?
Despite the depth of talent, deal flow and growth opportunities, relatively few international fund managers – particularly in infrastructure – have established permanent operations in Central and Eastern Europe.
I left Poland in 2010 to join Marguerite and have since worked primarily on investments elsewhere in Europe. Yet every time I return to the region, I am struck by the quality of local professionals and the sophistication of investment and distribution opportunities.
Given the scale of economic growth and capital activity, I expect – and hope – that more international infrastructure managers will establish a lasting presence in the region over the coming years.