Q2 2025 quarterly valuation update for the energy and infrastructure sector - spotlight on the price of politics

Three key themes from Q2 2025

Falling government debt yields, but rising yields in the US

This quarter saw a general fall in government debt yields across markets. The main exception was the US, with broader pressures linked to tariffs and federal-level spending plans amongst other things.

Recent transactions continue to benchmark NAV performance

Discounts to NAV have mostly reduced this quarter, with share prices of infra and energy funds generally increasing following tariff announcements. Recent public to private transactions have continued to help validate net asset valuations.

Political, regulatory, policy risks will often not impact valuation until they crystallise

The market is often slow to value political and policy risk unless/until they materialise or are seen as significant. Political and policy risks can be subsumed within wider country risk. Uncertainty may not just be reflected in price signals in a transactional context – making life more difficult for valuers.