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Stonepeak
HAJIR NAGHDY
SENIOR MANAGING DIRECTOR, STONEPEAK
As a global investor in essential infrastructure, Stonepeak takes a thematic approach across target sectors where we believe tailwinds are strongest.
Heading into 2022, we continue to focus on trends impacting three key areas: energy transition and renewables, specialised logistics and digital infrastructure. While the macro trends underpinning these sectors are attractive globally in our view, we see Asia as a particularly compelling region in which to deploy capital and expect interesting opportunities in the year ahead.
We believe that the global energy transition and shift toward renewable energy presents one of the most significant opportunities for private capital investment this century. We are seeing meaningful opportunities in this sector in Asia Pacific, where governments are pushing ambitious energy transition rollouts and placing serious policy focus on new technology. Electric vehicles, hydrogen (with 80 per cent of the APAC economies setting a national hydrogen strategy), offshore wind, and LNG as a key transition fuel displacing coal in the region are trends we are actively following.
Another area of rapid change and opportunity that we are seeing is communications and digital infrastructure. The number of regional internet users, networked devices, and fixed broadband subscribers continues to increase meaningfully year over year, driving significant demand for data centers and mobile infrastructure. APAC is set to continue to outpace North American and European markets in data growth and digital infrastructure demand.
Growing GDP and consumption trends in APAC are also catalysing the continued build-out of the logistics sector in the region with APAC expected to drive 50 per cent of the world’s consumption by 2030. E-commerce is playing a major role in the need for more logistics infrastructure: six of the top 10 fastest-growing e-commerce countries are in the APAC region. Modern logistics capacity needs to increase by anywhere from 50 per cent to 10 times in key Asian markets, requiring substantial investment.
Outside of Asia, as we think about other important areas of potential opportunity and challenge for sponsors in the year ahead, we see ESG and addressing pressing issues related to decarbonisation as critical to maintaining license to operate. GPs must have an increasingly sophisticated and fulsome view of the specific ESG challenges across their portfolio and a clear plan to measure and improve the ESG performance of their assets over time in line with net zero ambitions. 2022 will be an important year for sponsors across asset selection and management, measurement, and reporting as many continue to evolve their policies and processes amid increasing pressure from LPs and other stakeholders to demonstrate more meaningful contributions toward global solutions for climate change.
CHAPTER FOUR
LP SENTIMENT
