Private infrastructure is increasingly capturing investor attention as a compelling way to diversify portfolios and access stable, long-term cash flows that are less correlated with public markets. We spoke with Henry Willans, Managing Director and Head of Infrastructure Secondaries at Goldman Sachs Alternatives, to get his insights on the market, strategy, and what makes mid-market assets and secondaries particularly interesting.
What makes private infrastructure an attractive asset class today?
Private infrastructure offers investors exposure to the critical assets and essential services that people rely on every day. From transport and energy, to utilities and digital infrastructure, these assets often come with long-term contracted cash flows, downside protection through those contracts, and backing by real, hard assets. These characteristics make it a compelling option for wealth investors looking for an investment with in-built stability and predictability.
In today’s environment, with inflation pressures and interest rate volatility affecting traditional asset classes like equities and bonds, private infrastructure can provide both portfolio diversification and resilient income streams. Assets with inflation-linked contracts, for example, toll roads or regulated utilities, can help preserve purchasing power while providing steady cash flows.
Within the broad universe I am most excited about the opportunities within middle-market private infrastructure and the unique access route provided by the secondary market.
- Mid-market assets can offer distinct advantages over their large-cap counterparts. With fewer buyers and less competition, this segment provides more attractive entry valuations and greater flexibility to negotiate favourable terms for disciplined buyers. The potential for value creation is also significantly higher, as these assets are often under-resourced, leaving ample room for operational improvements and growth initiatives that are unavailable in more optimised large-scale assets. Finally, the mid-market grants access to niche sectors and regions, enabling tailored diversification and enhancing portfolio resilience while delivering stable, long-term cash flows.
- The infrastructure secondaries market is evolving quickly. In the first half of 2025, Goldman Sachs saw sourcing volumes surpass full-year 2024 totals, and is pacing for a record 2025. This growth is notable given the size of the primary private infrastructure market, about US$1.6 trillion in assets under management, yet secondary turnover remains below 1%. By comparison, the more mature private equity secondaries market sees 3-5% turnover, highlighting a substantial runway for growth as this access route matures.
We’re seeing more activity because limited partners (LPs), constrained by a slow exit environment, are increasingly turning to the secondary market to generate liquidity and rebalance portfolios. Simultaneously, general partners (GPs) are utilising continuation funds to retain premier assets, fuelling a surge in high-quality, non-traditional deal flow. With a deep reservoir of established assets and a structural scarcity of dedicated secondary capital, a clear buyer's market is emerging, allowing investors to access de-risked assets from motivated sellers.
How do infrastructure secondaries fit into a diversified portfolio?
Goldman Sachs believes private infrastructure secondaries offers an attractive risk-return profile, mitigation of the J-curve effect, diversification, and faster capital deployment.
Secondaries can provide exposure to mature, de-risked infrastructure assets, which can be acquired at a discount to net asset value (NAV) as opportunities frequently arise from motivated sellers that are often selling for non-economic reasons.
Secondaries are also a powerful tool for mitigating the J-curve effect that is typical of primary funds. By acquiring interests in operational assets that are already generating cash flow, investors can receive distributions much earlier and shorten the path to realisations while still benefiting from potential upside. This approach also facilitates faster capital deployment compared to the multi-year capital call process for primary funds, mitigating early-stage development risks.
A secondaries portfolio can also provide immediate diversification across various managers, vintages, and sectors, significantly reducing the "blind pool" risk associated with new fund commitments and enabling the accelerated construction of a broad, high-quality portfolio.
Can you describe your approach to managing mid-market infrastructure assets?
Our focus is on identifying high quality assets that are operationally sound but may be overlooked in the broader market. We apply rigorous due diligence, actively engage with management teams, and seek ways to enhance value while maintaining strong risk management.
The mid-market space often provides more opportunities for tailored solutions and creative structuring. This is the case because mid-market infrastructure assets are typically smaller, less widely targeted, and have more exit options than large-scale assets. That creates both flexibility and opportunity:
- Fewer competing bidders: Large institutional funds often focus on mega-projects, leaving mid-market assets less competed and more accessible. This allows managers to negotiate terms or bespoke structures tailored to their investors’ needs.
- Customisation potential: Mid-market deals often require more creative financing or operational solutions, such as structuring mezzanine layers, revenue-sharing agreements, or partial exits. Investors can design the capital stack or risk-sharing arrangements to suit their portfolio objectives.
- Active management opportunities: Smaller assets typically offer greater scope to actively engage with management teams, improve operations, or unlock hidden value - something that’s harder to do in large, fully optimised assets.
- Diversification benefits: Mid-market infrastructure allows investors to access niche sectors or geographies that are underrepresented in larger portfolios, enhancing overall portfolio diversification.
In short, Goldman Sachs views mid-market private infrastructure as offering lower competition, greater flexibility, and active value creation potential, making it ideal for tailored investment strategies that meet specific investor goals.
What do you think investors often misunderstand about infrastructure secondaries?
Some investors see secondaries as simply a quicker way to invest, but the strategy is more nuanced. The key is really understanding the underlying assets including their lifecycle, contractual structures, and operational risks, as well as the potential for both income and capital growth.
Common misconceptions include:
- “There’s limited upside remaining.” In many cases, secondary opportunities involve assets that still present opportunities for continued growth and value creation.
- “Secondaries reduce flexibility.” In fact, what we have found is that they can provide more optionality. Because there is typically an identified portfolio of assets with limited blind pool risk, investors can tailor exposure to sectors, geographies, or specific projects, and can often negotiate terms that would be difficult in a crowded primary market.
- “Sellers offload undesirable or poor-performing assets.” The motivations for selling are typically strategic and unrelated to asset quality, driven by portfolio management needs, due to the ‘denominator effect’, actively managing portfolios around regulatory changes, or liquidity requirements – not poor performance.
On the non-traditional side, continuation funds are specifically designed to allow a GP to retain high-conviction assets beyond the life of the original fund, while providing a liquidity option for existing investors, or LPs. The continuation funds Goldman Sachs pursues typically have strong GP alignment, a track record of performance and asset familiarity, and a clear value creation plan.
Goldman Sachs believes secondaries are a powerful way for institutional and individual investors to access private infrastructure, with the market poised for substantial growth and further adoption - similar to what we saw in real estate and private equity secondaries over the past decade.
On a personal note, what drew you to infrastructure investing?
As an engineer by training, I’ve always been fascinated by the physical structures that surround us, and how they work.
Infrastructure investing blends analytical rigor with tangible, real-world impact. It allows me to apply a quantitative and systematic thought process, much like in engineering, to the strategic allocation of capital. I appreciate the opportunity to move beyond theoretical design to assess, build, and improve the essential assets that form the backbone of our economy and society.
Outside of work, what do you enjoy doing?
I find a great deal of satisfaction in hands-on, practical projects. A few years ago, I graduated from building Lego cars and finally bought a classic car from the 1960s. It requires constant maintenance, and I’m determined to do as much of the work myself. I enjoy the methodical nature of diagnosing a problem, sourcing the parts, and executing the repair.
There is a unique reward in the patience and attention to detail required to see a complex project through to completion, and of course, in driving it once the work is done. With two young children, I think it is also important for me to model a practical, self-reliant approach to problem-solving. By tackling these projects myself, I hope to show them the value of understanding how things work and the confidence that comes from being able to find a solution independently.
What Is A Continuation Fund?
A continuation fund (or continuation vehicle) is created when a GP transfers one or more assets from an existing fund into a new vehicle. These transactions aim to:
- Provide liquidity at a fair market price for LPs looking to exit their position.
- Allow existing LPs to maintain exposure to the asset.
- Give new investors access to a high-quality asset managed by a GP already deeply immersed in the business and a plan for further growth.
LPs typically elect either cash (exit), or a pro-rata interest in the new vehicle.
A secondary manager usually:
- Provides an independent valuation for the transaction, avoiding the potential conflict of the GP setting the transfer price.
- Negotiates the structure and terms of the continuation vehicle to ensure continued alignment; and
- Replaces any exiting LPs.
Strategic Advantages of Continuation Funds
Continuation funds are largely bespoke and can vary greatly in size and structure. Some are centered on a single asset, while others hold a more diversified portfolio.
Investors in continuation vehicles benefit from investing in known assets alongside a GP that already intimately understands its operations and has a compelling case for further value creation. The GP is able to seamlessly continue executing from their existing playbook, enabling the secondary investors and LPs to bypass the early, lower-growth phase typical of new deals, where a GP is still building familiarity with the asset and refining its value creation strategy.
The GP’s established understanding of the business can also offer a degree of downside protection for new LPs compared to a primary investment, as value creation is driven by the continuation of a well-developed investment approach.
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