Information on the Target

Actis has identified significant opportunities in growth markets infrastructure, particularly in sectors such as energy and technology. The firm recognizes that demographic shifts and economic transformations in emerging markets are paramount in driving demand for sustainable infrastructure services. This investment strategy is aligned with Actis's commitment to supporting critical infrastructures that meet evolving market needs.

Industry Overview in the Target's Specific Country

Emerging markets are exhibiting impressive dynamics as they experience growth in income levels, urbanization, and industrialization. With over 90% of global population growth projected to come from non-OECD countries by 2045, these regions represent an unprecedented opportunity for infrastructure investment. For instance, Southeast Asia has seen its electricity demand soar by four to five times since 2000, while demand in more developed nations has stagnated.

This heightened demand for infrastructure investment is timely, especially against the backdrop of current geopolitical disruptions. Countries may reassess their strategies regarding infrastructure as they confront issues related to energy security and data protection. Emerging markets are especially well-positioned, given their lower debt levels, stronger growth forecasts, and more resilient financial systems compared to advanced economies.

The necessity for infrastructure spans various sectors—including renewable energy and telecommunications—as the rise of mass consumer classes continues to reshape these economies. The G20 members, particularly the “big middle” economies like India, Brazil, and Mexico, present unique prospects due to their vast markets and robust domestic financial infrastructures.

From a macroeconomic lens, Actis emphasizes a tailored approach to investment in these dynamic markets. Utilizing tools like the Actis Atlas, Actis aims to identify and target regions with proven private infrastructure investment records that can withstand economic fluctuations.

The Rationale Behind the Deal

The rationale for investing in growth markets infrastructure is driven by the confluence of key global trends: decarbonization, digitalization, and deglobalization. These changes offer vital, sustainable infrastructure investment opportunities, particularly in sectors poised for rapid growth. As emerging markets shift away from reliance on outdated structures, Actis anticipates a surge in domestic investment focused on addressing infrastructural needs.

Furthermore, the substantial infrastructure investment opportunity, estimated at approximately $9 trillion annually, is accentuated by current economic and geopolitical uncertainties. Actis believes these factors can facilitate essential infrastructure funding, particularly in emerging economies, which are set to experience the most significant growth in demand.

Information About the Investor

Actis is a leading global investor focusing on sustainable infrastructure in growth markets. With a proven track record of investing in developing economies, Actis is well-positioned to leverage its insights and expertise to identify high-potential investments. The firm's strategic focus is on maintaining a long-term commitment to these markets, ensuring its investments are resilient and growth-oriented.

The firm recognizes the importance of understanding each market's unique characteristics. Actis has cultivated experience in navigating the complexities associated with investing in emerging and growth markets, allowing it to make informed investment decisions in sectors that offer sustained value creation.

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Experts view Actis's strategic approach to growth markets infrastructure as a timely and potentially lucrative investment opportunity. By focusing on growth areas that are witnessing rapid demand increases, the firm positions itself to benefit from long-term trends rather than succumbing to short-term market volatility.

Investors that disregard traditional perceptions of risk associated with emerging markets may find significant rewards. With economies like India and Southeast Asia leading demand for infrastructure, returns on well-placed investments in these regions could surpass those found in more established markets.

Moreover, by prioritizing sectors such as renewable energy and digital infrastructure, Actis aligns its investment strategy with overarching global trends that are increasingly prioritized by both governments and consumers. This strategic alignment can enhance the potential for sustained profitability and growth.

However, navigating such investments requires expertise and commitment to operational excellence. Successful asset managers will need to emphasize organic growth and superior asset pricing to yield the best outcomes. Overall, Actis's focus on leveraging its deep understanding of these markets suggests a positive outlook for its investments in growth markets infrastructure.

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