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Alternative investments

Beyond the core: the rise of mid-market infrastructure 

Mid-market infrastructure has evolved from a niche allocation into one of the most compelling areas in alternatives. As essential assets and services move closer to end users, the opportunity set is expanding. 

Why mid-market infrastructure deserves attention now

Investors are increasingly looking beyond traditional core infrastructure for exposure that may offer growth, diversification, and meaningful value creation. Mid-market infrastructure can provide access to businesses and platforms where operational improvement, institutionalisation, and strategic scaling matter as much as thematic tailwinds.

Success does not come automatically. Outcomes depend on business quality, revenue resilience, and the manager’s ability to execute throughout ownership.

Why selectivity matters in mid-market infrastructure

The mid-market could offer investors a way to access the next generation of essential assets while diversifying beyond concentrated public-market exposures. 

At the same time, the segment demands selectivity as return dispersion can be wide.

In a portfolio context, strong outcomes depend on understanding how geography, regulation, sector exposure, revenue model, leverage, and value creation drivers interact across a portfolio.

Megatrends may set the direction, but disciplined implementation and thoughtful manager and investment selection can determine whether mid-market infrastructure helps deliver durable value. The potential is real, and so are the demands it places on investors.
Julia Schiffer

Head of Infrastructure – Europe

Top considerations for investors

As infrastructure moves closer to end users, smaller and more localised platforms are becoming increasingly important across critical sectors.

Many mid-market businesses are still founder- or family-owned, creating scope for professionalisation, operational improvement, and strategic scaling.

Smaller and mid-market funds can potentially provide attractive return potential — but results vary widely, reinforcing the importance of manager selection.

Risks are often underestimated: revenues may be more variable and concentrated, sensitivity to market, technology, and financing conditions can be higher, and barriers to entry may be lower — so disciplined underwriting, active ownership, and thoughtful portfolio construction are essential, especially for asset-light businesses that can be harder to scale than they appear.

Want to dive deeper?

Read the paper for an overview of the opportunity set, the key risks to watch, and Mercer’s perspective on what it takes to build a successful mid-market infrastructure allocation.
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About the author(s)
Julia Schiffer

Head of Infrastructure – Europe

Eleni Piperaki

Senior Investment Research Specialist

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