Infrastructure growth in Europe
We believe there is a need for increased capital to support infrastructure development as Europe continues to prioritise a low-carbon transition and support ongoing digitisation.
What’s driving Europe’s infrastructure transition?
Infrastructure is a key tenet of our growing Private Markets platform, reflecting the emergence of several converging trends that are creating a potentially ripe investment environment.
The increased digitisation of the economy, the need to meet energy transition goals and a resetting of geopolitical relationships and supply chains are among the most prominent drivers. Against this backdrop, we see a need for increased capital to support infrastructure development.
We’ve developed our infrastructure platform in response to investor demand for the asset class.
Across debt and equity strategies, our focus spans infrastructure assets that meet the needs of a rapidly changing world.
Key infrastructure growth drivers
Rapid digitisation of the economy
Forecasted growth for cloud computing, AI and data processing has created an increasing need to support digital infrastructure assets and, in our view, a potentially substantial opportunity for investors.
A resetting of geopolitical relationships and supply chains
Europe’s desire to achieve greater levels of energy security and data sovereignty may continue to provide a strong tailwind for infrastructure investment.
We also believe additional capital will be needed to mitigate the impact of supply chain reconfiguration between traditional trading partners.
Europe’s imminent net-zero targets and energy security objectives
Europe’s low-carbon transition won’t be achieved just by funding sources of clean energy. Capital will have to be provided to support the entire transition – including emerging infrastructure innovation that can alleviate pressure on the energy grid as more renewables are deployed.
L&G case studies
Underpinning the rapid digitisation of the economy through investment in data centres: Our digital infrastructure partnerships
L&G has invested in data centres since 2019, originating opportunities through both our public and private sector partnerships.
Our partnership with Kao Data
Alongside Infratil, L&G has invested in Kao Data since 2019, supporting its growth from a single-site data centre to a multi-site platform. Kao Data has seven data centres (planned and operational) across four locations in the UK. Most recently, its began constructing a £350m 40MW data centre in Manchester, set to be the largest facility in the North of England.1
Partnering with Goldacre and sineQN to deliver a regeneration project in Newham
We received unanimous planning approval for our £750m hyperscale data centre investment in the London Borough of Newham, alongside our partners Goldacre and sineQN. This represents a significant investment and contribution to further regeneration in the borough, generating £88m in GVA and creating over 1,000 skilled jobs2 during the construction and operation phases.
Supporting Europe’s energy transition: The L&G NTR Partnership
Our infrastructure specialists work closely with our external strategic partners to deploy private capital required to help deliver clean power infrastructure.
Our partnership with NTR
Building on a long-standing partnership that combines our investment and asset management expertise with the extensive networks and capabilities of specialist renewable energy asset manager NTR, the L&G NTR Clean Power Europe Fund (CPEF) invests in clean power infrastructure assets across wind, solar and energy storage.
L&G and NTR have recently announced3 secured total commitments of €607m4 at the final close of the L&G NTR Clean Power (Europe) Fund, supporting Europe’s ambitious decarbonisation and energy security agenda.
Source: L&G, as at June 2025. Please note the L&G NTR Clean Power (Europe) Fund is currently closed to new investment (as at April 2025).
A near-term requirement for long-term private investment potential
According to the European Central Bank (ECB), more than €1tn in annual infrastructure investment is needed over the next five years to support low-carbon and digital initiatives in Europe5. Additionally, $600bn of investment will be made in digital infrastructure alone by 2035, fueled by increased use of cloud computing, social media, streaming and AI.6
The infrastructure funding landscape is also undergoing a structural shift.
European banks’ infrastructure lending capacity remains constrained by Basel III requirements. We also see rising sovereign debt levels (Eurozone average 88.2% of GDP7) and a recent focus on defence spending potentially limiting governments’ ability to fund critical projects. We think this creates opportunities for private capital to address funding gaps.
Multiple avenues exist for institutional investors to access European infrastructure opportunities across the risk-return spectrum.
These range from direct equity investments and co-investment opportunities to senior and junior debt strategies. Find out more about our Private Markets investment solutions.
In the media
Explore more of our views on infrastructure and the opportunity for investors
Meet our infrastructure team
David Emes
Head of Infrastructure Equity, Capital Raising, Asset Management, L&G
Jenny Staley
Head of Private Credit, Capital Raising, Asset Management, L&G
John Carey
Head of Infrastructure Debt (Europe) , Asset Management, L&G
Matteo Colombo
Managing Director, Digital Infrastructure, Asset Management, L&G
Sources
- Announcement published on 2 October 2024, Kao Data starts Work on the Construction of its £350m, Greater Manchester Data Centre - Kao Data
- Announcement published on 16 October 2024, Planning consent secured by L&G, Goldacre, and sineQN for £750m hyperscale data centre investment in Newham, London
- Announcement published on the 8 April 2025, LGIM and NTR raise €390 million in first close of Clean Power (Europe) Fund
- €607m has been raised from investors, which includes €584m of commitments to the Fund and €23m in deployed and allocated co-investment capital alongside the Fund.
- ECB, 2024
- McKinsey. UK - Project Gigabit, Building Digital UK, February 2024
- Eurostat, January 2025
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Key risks
The value of any investment and any income taken from it is not guaranteed and can go down as well as up, and investors may get back less than the amount originally invested. The risks associated with each fund or investment strategy should be read and understood before making any investment decisions. Further information on the risks of investing is available from L&G's Fund Centres.
While L&G has integrated Environmental, Social, and Governance (ESG) considerations into its investment decision-making and stewardship practices, Scamsthis does not guarantee the achievement of responsible investing goals within funds that do not include specific ESG goals within their objectives.
Assumptions, opinions, and estimates are provided for illustrative purposes only. There is no guarantee that any forecasts made will come to pass.
Case study shown for illustrative purposes only. The above information does not constitute a recommendation to buy or sell any security.