Europe faces $800bn annual infrastructure funding need, says KKR

Europe requires between $700bn and $800bn annually for infrastructure investment, nearly double current spending levels, according to KKR's co-head of European infrastructure, Vincent Policard. Speaking to Bloomberg Television, Policard highlighted the growing role of private capital in plugging the funding gap as governments aim to boost investment in critical sectors such as energy, artificial intelligence, and space infrastructure.

KKR recently raised over $19bn for its latest infrastructure fund, the largest ever dedicated to the asset class. Policard believes the UK remains an attractive market for infrastructure investors due to its stable legal framework, despite ongoing political debates around public ownership of essential infrastructure. KKR withdrew a proposed £4bn investment in Thames Water last year, which is restructured almost £19bn of debt while creditors negotiate a rescue package with regulators.

Policard also emphasized the advantage of KKR's use of permanent and long-duration capital in infrastructure investing, with one-third of the firm's infrastructure assets held through open-ended vehicles, allowing investments to be retained for longer periods. The comments come as private markets firms continue to raise larger pools of capital for infrastructure strategies, driven by the investment requirements in energy transition, digital infrastructure, and public utilities.