Monday Market Minute | Dec 08, 2025

Infrastructure closes 2025 as the best-performing alternative asset class

What Moved

As year-end performance data compiled, Canadian infrastructure funds emerged as the top-performing alternative asset class of 2025. Blended returns of 9-12% across infrastructure strategies outpaced private credit (8-10%), real estate (6-9%), and PE (highly variable by vintage and sector). The outperformance was driven by three factors: inflation-linked revenue contracts that captured tariff-driven price increases, counter-cyclical government spending that expanded the project pipeline, and long-duration cash flow profiles that benefited from declining discount rates as the BoC cut.

Why It Matters

Infrastructure's 2025 performance validated the asset class's core proposition: durable, inflation-protected income with low correlation to trade-driven economic volatility. For Canadian HNW investors, the lesson was that infrastructure belonged in the core alternative allocation — not as a satellite position. The asset class offered the stability of fixed income with equity-like returns, and the increasing availability of exempt-market infrastructure funds made access practical for accredited investors. The 2025 vintage of infrastructure commitments was likely to be among the best of the decade.

Signal to Watch

Whether the federal government's infrastructure spending commitments would be sustained in the 2026 budget or trimmed as fiscal consolidation pressures emerged from the tariff-related economic slowdown.

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