Core Plus: Redefining Infrastructure

Core plus infrastructure combines infrastructure-like cash flow stability with growth-oriented business strategies. It is the “adjacency layer” of infrastructure—businesses that provide essential, nondiscretionary services, exhibit high barriers to entry and deliver resilient and predictable cash flows.

Macquarie Capital’s Rob Valentine, Brian Hogan and David Porter, who sit within the Americas Infrastructure, Industrials and Leasing Team, discuss how they’re seeing the core plus sector evolve today and why it continues to resonate with founders, management teams and long-term investors.

Certainty of demand in essential services

While industrial and environmental services were an early proving ground for core plus strategies, the approach has expanded in recent years as investors increasingly recognize its defining attributes: certainty of demand, essentiality of service, recurring cash flows and reinvestment-led value creation, a supportive regulatory regime, durable performance across the cycle and proven access to long-term capital.

Rob Valentine, Head of Infrastructure, Industrials and Leasing for Macquarie Capital in the Americas, points to chemicals, consumer, defense, education, energy, environmental services and transport & logistics as some of the newer areas experiencing core plus interest in North America.

Infrastructure-like characteristics, redefined

As the strategy has evolved, so has the definition of ‘infrastructure’. David Porter, Managing Director, Infrastructure Advisory for Macquarie Capital in the Americas, underscores that investors are increasingly focused on businesses that share the core characteristics of traditional infrastructure, even if they fall outside historic sector boundaries.

This perspective allows businesses with physical assets, recurring customers and regulatory or structural barriers to entry to be evaluated through a core plus lens, particularly where long-term demand and reinvestment opportunities align.

Defense

Businesses with long-standing relationships based in strategic locations providing highly specialized and regulated services.

Transport and logistics

Critical assets in supply chains, including cold storage facilities, railcar fleets, pooled pallets, terminals and pipelines.

Municipal solid waste

Businesses with an end disposal solution or essential assets in that supply chain, including trucks and transfer stations.

Recurring cash flow and reinvestment-led growth

Central to core plus investing are recurring and stable revenue models which provide predictability and resilience across market and economic cycles. According to Brian Hogan, Head of Industrial and Environmental Services in the Americas at Macquarie Capital, this visibility allows investors to prioritize reinvestment and long-term value creation.

A defining aspect of core plus strategies is to reinvest cash back into the business to support sustained, long-term growth. Rob Valentine emphasizes that the willingness to forego immediate distributions in favor of reinvestment has become increasingly important in unlocking higher-return opportunities.

This reinvestment-led approach supports operational resilience, technology investment and selective add-on acquisitions within fragmented markets. The result is a model that combines infrastructure-like cash flow stability with growth-oriented business strategies.

Long-term, patient capital

Core plus strategies are designed with value creation in mind, driven by steady execution rather than market timing. This long-term orientation is particularly important in sectors where regulatory processes, asset development and operational transformation require sustained investment.

While core plus remains relatively new as a defined investor category in North America, the opportunity set continues to expand. As track records develop, Brian Hogan expects core plus to be increasingly recognized alongside private equity and corporations as a credible buyer group, offering founders and management teams a long-term partner aligned with durable growth.

Why core plus matters now

Looking ahead, the core plus opportunity set continues to broaden, with an increasing number of investors and material additional capital looking for a home in this sector. Core plus is best understood not as a short-term transaction, but as a partnership approach, built to support businesses that underpin everyday economic activity.

READ MORE FROM MACQUARIE ASSET MANAGEMENT

Disclaimer

This information is a general description of the Macquarie Group only. Before acting on any information, you should consider the appropriateness of it having regard to your particular objectives, financial situation and needs and seek advice. No information set out above constitutes advice, an advertisement, an invitation, a confirmation, an offer or a solicitation, to buy or sell any security or other financial, credit or lending product or to engage in any investment activity, or an offer of any banking or financial service. Some products and/or services mentioned on this website may not be suitable for you and may not be available in all jurisdictions. All securities and financial products or instrument transactions involve risks. Past performance of any product described on this site is not a reliable indication of future performance.