Winning investments possess a certain scale, flexibility and growth potential that fosters resilience in adversity, according to CVC DIF’s Tom Goossens.
With increased cost of capital across the board, there is today a renewed appreciation for stable and resilient investments, as well as a more prudent approach to leverage. Winning investments typically have operational flexibility, further growth potential and can adapt when faced with adverse conditions, says Tom Goossens, partner and co-head of CVC DIF’s infrastructure funds.
Traditional infrastructure is evolving to match the challenge of higher interest rates, strong competition and the redrawn political landscape.
What defines the investments that have proven most resilient in this changed interest rate environment?
Before looking at assets, we have to look at the owners behind them. When higher rates make borrowing more expensive, the consequences of past investment decisions surface much sooner. For some, higher rates have been a painful reminder that infrastructure investing is about building resilience.
Sponsors are going back to basics – prudent capital structures, strong asset bases, and best-in-class management. Winning assets already have value embedded in the existing base, with clear pathways to enhancement.
District heating is an example. Although mature and slow-growing, investors like the assets for their yield and stability. The best operators expand them into multi-product offerings such as energy-as-a-service for diversified revenues.
CVC DIF holds several such companies, including Loimua in Finland, which has expanded into industrial heating systems under long-term, inflation-linked contracts.
Integrated utilities and transportation investments have performed strongly due to these characteristics.
How has the changing geopolitical climate impacted the industry?
CVC operates across 30 global offices and is accustomed to navigating regional complexities.
Geopolitical changes have shaped investor preferences. Italian investments once commanded higher returns than French equivalents, but risk premiums have now converged.
In the US, tariff, inflation and policy uncertainty have increased scrutiny.
Dealflow remains strong in Canada with higher regulatory predictability, though currency risk remains a factor. CVC recently acquired SBA Canada, a telecom tower portfolio with operational improvement potential, targeting mid-teens IRR.
The firm is also exploring adjacent geographies and sectors, including district cooling in Abu Dhabi.
Investor appetite has shifted toward European assets and diversification amid policy uncertainty.
Has the approach to leverage changed?
Yes. Before 2022, liquidity was abundant and financing terms were looser. Discipline had to come from sponsors.
Today, leverage is approached more conservatively – lower gearing, longer tenors, interest-rate hedging.
CVC DIF prioritises operational strength first, then financial optimisation. Early years involve lower leverage to build track records before optimising capital structures.
This has resulted in strong lender interest and successful refinancings.
How does an adverse market impact the ability to evolve and innovate?
Adversity can come from macro challenges or overly competitive markets.
In the Nordic district heating market, pricing became so aggressive that CVC DIF shifted strategy – acquiring a UK-based developer and building a Nordic-style platform in the UK.
Operational flexibility enables companies to pivot; single-asset PPPs have limited ability to do so.
Mid-market operators (CVC DIF’s focus) possess agility and can outperform larger incumbents.
The principles we’ve discussed will always endure: discipline in approach, creativity in execution and the critical importance of operational excellence to create value
How is the balance between traditional infrastructure and newer operational models evolving?
Infrastructure investors increasingly understand diversified, multi-purpose operational companies.
Waste management illustrates this shift: from single-asset PPP projects to integrated businesses spanning collection to recovery.
Waste-to-energy now represents broader opportunities, with the market better equipped to price complexity.
What was once “core” infrastructure increasingly resembles “core-plus”, with optionality and growth levers rather than added risk.
Core principles endure: discipline, creativity, operational excellence, and resilience. Rooted in these, investors can navigate market cycles with confidence.
This article first appeared in Infrastructure Investor in December 2025