Impact Growth Capital Newsletter

What Hamilton Lane's $1.9B raise reveals about infrastructure investing

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Impact Growth Capital
February 06, 2026

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This week at IGC:
How to Evaluate "Infrastructure" Investments (Without Getting Burned)

A simple 3-question framework institutional allocators use to separate real infrastructure economics from thematic hype

Quick question: If someone pitches you an "infrastructure investment" in data centers, EV charging networks, or climate adaptation how do you know if it actually has infrastructure economics?

Hamilton Lane just raised $1.9B for infrastructure. Institutional capital is flooding into the sector. But not all "infrastructure-themed" deals offer infrastructure returns.

Here's the framework we use to evaluate whether something is truly infrastructure or just a good story.

First, understand what changed:

"Infrastructure" used to mean bridges, highways, and utilities. Today, institutional allocators recognize that economic infrastructure includes energy grids, data centers, logistics networks, and even affordable housing near employment centers.

Why the expansion? Decades of public underinvestment created permanent funding gaps. Private capital is filling voids in systems society cannot function without.

Real Market Signal

Hamilton Lane closed their infrastructure fund with significant oversubscription, targeting energy transition, digital infrastructure, and climate adaptation. This wasn't a thematic betit was institutional recognition that these sectors offer defensive cash flows (inflation hedge, recession resistance) with structural growth tailwinds.

The 3-Question Infrastructure Filter

 1 Is demand necessity-driven, not speculative?

True infrastructure serves essential functions where failure creates systemic disruption. Energy, water, connectivity, mobility these are non-discretionary. If adoption depends on behavior change or consumer preference, it's not infrastructure.

2 Are cash flows contracted or regulated?

Infrastructure economics depend on predictable revenue through long-term contracts, rate structures, or take-or-pay agreements. Merchant risk (selling into spot markets with price volatility) is not infrastructure risk. If revenue depends on market pricing, it's a commodity play.

3 Does operational complexity create a moat?

The best infrastructure opportunities require technical expertise, regulatory navigation, and local stakeholder management. These barriers prevent capital commoditization. If any sponsor with money can compete, returns will compress.

 

Let's apply this framework to a real example:

EV Charging Networks

Question 1 (Necessity): Is EV adoption necessary or speculative? Today it's still adoption-dependent, but in regions with combustion engine bans, it becomes necessity-driven.

Question 2 (Contracted Revenue): Are charging fees contracted or merchant? If you're selling charging at spot prices with no contracts, that's not infrastructure economics. But if you have fleet contracts or utility rate agreements, that changes.

Question 3 (Operational Moat): Does deploying charging stations require permitting expertise, utility relationships, and site control? Yes these create barriers. Pure capital deployment without operational complexity won't sustain returns.

Verdict: EV charging can have infrastructure economics in specific geographies with the right contract structure and operational capabilities. But not all EV charging deals qualify.

Questions to Ask Your Advisor or Sponsor

What percentage of revenue is contracted beyond 5 years?

If you stopped reinvesting, would demand disappear or stay stable?

What operational capabilities prevent competitors from replicating this?

How does this perform in a recession? (True infrastructure should be defensive)

Key Takeaway

Infrastructure investing is not about chasing government stimulus headlines or ESG themes. It's about identifying where decades of underinvestment create permanent capital deployment opportunities in systems society cannot function without.

Not all "infrastructure" investments offer infrastructure economics. The 3-question filter helps you separate durable, necessity-driven assets from thematic bets that won't deliver infrastructure returns.

How We Apply This:

At Impact Growth Capital, we view workforce housing as social infrastructure it passes all three filters (necessity-driven demand, inflation-linked cash flows, operational complexity). We also invest in vertical SaaS serving infrastructure sectors, where software becomes mission-critical for operators deploying physical capital. Both capture infrastructure economics without megadeal complexity.

Jesse Sells
Founder | Impact Growth Capital

If you'd like to discuss how institutional allocators evaluate infrastructure opportunities, or how this framework applies to your portfolio feel free to reply to this email.

Next week: "How to read construction cost data for hidden acquisition opportunities"

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