“The UK and European investment opportunities within real assets – both listed and private – look set to be quite exciting in 2025,” says Anthony Curl, CIO at Gravis, as he and his colleagues share their outlook for the year ahead and their reasons for optimism.
“As my colleagues expand on below, we believe we are at the dawn of a super-cycle for renewable energy infrastructure, supported by favourable policies as well as encouraging support mechanisms for emerging technologies. Beyond sustainable infrastructure, there are also extremely compelling opportunities, whether debt or equity, that exist in other real asset sectors.
“Our enthusiasm seems to be shared by institutional investors, from which we see improving sentiment and growing allocations for these asset classes. However, more than ever, skilful managers are required to originate and structure these investments selectively.”
As we look ahead to 2025, Gravis’s fund managers give their thoughts on the outlook for listed property, infrastructure and private credit in the UK:
High growing yield and double-digit upside: what’s not to like about UK listed property in 2025?
“The outlook for UK listed property in 2025 is brighter than it has been in years,” says Matthew Norris, manager of the VT Gravis UK Listed Property (PAIF) Fund.
Key drivers include continued M&A activity, robust equity issuance to fund future growth, and thriving sectors like purpose built student accommodation and build-to-rent, which are expected to lead rental growth.
“The sector promises a potent mix of yield, growth, and upside,” continues Matt. “With a forecasted 5% dividend yield, 5% growth, and potential 20% capital upside, UK listed property is well-positioned for the year ahead.
“Despite rising debt costs, moderate supply and robust rental demand provide resilience. Investor sentiment is also improving. In late 2024, we saw material fund inflows underscoring growing confidence, a trend likely to persist as Bank of England rate cuts ease financial pressures.
“2025 is shaping up as a year of opportunity for UK listed property, blending attractive yields, steady growth, and a clear path for capital appreciation. Investors seem ready to seize the moment.”
Infrastructure and renewables: the promises made in 2024 need to be actioned in 2025
“The UK infrastructure sector in 2025 represents the start of a once-in-a-century opportunity to transform the economy and drive toward sustainability,” says Phil Kent, adviser to GCP Infrastructure Investments Limited. “Some call it an infrastructure super-cycle; whatever the term, it signals major opportunities for investors.”
The year ahead is pivotal for delivering on 2024’s promises, with significant investments needed to modernise networks, decarbonise the grid, and address challenges like energy intermittency and interconnectivity.
“Labour’s accelerated target to decarbonise the electricity grid by 2030, alongside broader net zero goals, demands rapid action and collaboration between public and private sectors,” continues Phil.
“Enabling factors such as regulatory reform and revenue support models are critical to unlocking private investment. The establishment of the National Wealth Fund and GB Energy will play a vital role in mobilising capital, but execution must match ambition.
“The challenges are immense. Decarbonising hard-to-abate sectors like transport, heat, and industry requires scaling up solutions at unprecedented rates. Yet, for investors, these challenges also signal vast opportunities. As infrastructure adapts to meet sustainability goals, the sector could usher in transformative economic growth.
Three reasons why allocation to private credit could increase in 2025
“Private credit is poised for significant growth in 2025, driven by transformative trends and an improving credit environment,” says Albane Poulin, Head of Private Credit at Gravis. “Decarbonisation, decentralisation, and digitalisation should provide significant opportunities for private lenders”.
Several factors underpin Albane’s optimism.
“First, the credit environment is improving,” she continues. “Lower interest rates and easing liquidity pressures are expected to boost M&A activity, creating new opportunities for private lenders. After a spike in default rates during 2024, we anticipate a decline in 2025, particularly in the US in sectors like healthcare, telecom, and business services. With inflation moderating and borrowing costs falling, refinancing risks are diminishing, especially for cyclical sectors. This dynamic creates a fertile landscape for private credit.
“Secondly, allocations to private credit are set to rise. Investors are likely to shift from traditional fixed-income assets, where tight spreads offer minimal additional yield. In contrast, private credit provides superior risk-adjusted returns, greater stability, and less volatility. As interest rates fall, its all-in coupon becomes even more attractive. Private equity investors, grappling with challenges in exiting investments, are expected to embrace private credit for its predictability and certainty of returns. Pension schemes, too, are likely to increase allocations, particularly in infrastructure debt, which offers predictable income and aligns with government policies promoting private investment in key sectors.
“Finally, infrastructure remains a compelling focus area. Decarbonisation and energy transition efforts are driving demand for innovative financing solutions, requiring strong technical expertise and a proven track record from managers. Infrastructure loans, particularly those with BB credit ratings, present an appealing risk/reward profile, combining strong collateral with the potential for alpha generation.
“Private credit is well-positioned to play a pivotal role in global economic transformation, offering stability, income, and opportunities in the evolving landscape of 2025.”
