Beyond scale: rethinking the engine room of European infrastructure

Our experience over more than a decade – with around €3 billion invested across energy, transport and digital infrastructure – consistently points to the same conclusion. The lower mid-market is where policy ambition, operational delivery and investor returns align most effectively. There’s less need for intermediaries, and it’s materially less competitive. This gives space for genuine value creation, rather than simply financial engineering.

This is not a question of taking more risk: it’s about operating closer to the assets, closer to local stakeholders and closer to the decisions that determine whether Europe’s economic and decarbonisation objectives are delivered in practice.

Policy tailwinds and competitive advantage

Recent reforms in the EU’s market design for electricity, quicker permit approvals, and the Net-Zero Industry Act have shifted the balance in favour of assets that can adapt quickly and align with local policy priorities. Small- and mid-cap platforms have a structural advantage. In practice, this means utilities that work constructively with municipalities, transport assets embedded within national and regional strategies, and energy platforms that can adapt business models as subsidy regimes and security-of-supply priorities evolve. Large, centralised assets often struggle to respond at this pace.

The Draghi competitiveness report and the ongoing debate about Europe’s cost of capital highlight the importance of bilateral, primary deals that avoid auction-driven premia and that can deliver better-timed execution. This matters in an environment where value is increasingly created through operational decisions rather than multiple expansion.

Risk, value and evidence

The notion that smaller assets are riskier doesn’t stand up to scrutiny. In regulated sectors, risk is defined far more by framework stability and governance quality than by asset size. Our utility investments in Finland, for example, operate under the same regulatory regimes as larger peers, yet benefit from more conservative capital structures and greater scope for hands-on asset management.

This difference in governance and capital discipline translates into outcomes. And the results are measurable through financial key performance indicators that capture both short-term returns and long-term sustainability-driven resilience. In 2024, our energy assets generated nearly 900 GWh [1] of renewable electricity, avoiding 274,000 tonnes of CO₂e [2]. In the same year, our district heating platforms delivered 1.4 TWh [3] of reliable, low-carbon heat to over 88,000 customers; our electricity distribution assets supported security of supply through a harsh Nordic winter; and our trains were among the most reliable on the UK network.

Agility, local solutions and systemic change

Small- and mid-cap assets move at a different pace. Development timelines are shorter, adaptation is faster, and innovation is less encumbered by bureaucracy. In Finland, this has enabled the rapid deployment of electric boilers to exploit periods of low-cost renewable power, the co-location of data centres to capture waste heat, and the diversification of fuel sources within district heating networks to improve resilience. These initiatives were delivered through close engagement with management teams and local authorities, and implemented within months rather than years.

In Italy, a similar logic underpins the development of biomethane platforms, which are focused on upgrading existing biogas assets rather than pursuing greenfield development. This approach leverages existing infrastructure, shortens delivery timelines, and aligns decarbonisation objectives with energy security and local agricultural systems.

European energy policy is rightly ambitious, but the practical work of decarbonisation and resilience is local. Electrifying transport, decarbonising heat, and building digital infrastructure are challenges that play out in villages, towns and municipalities. Small- and mid-cap investors are embedded in these contexts. By working directly with management teams, local authorities and communities, we can deliver solutions that are tailored, rapid and enduring.

This strategy prioritises essential services, high barriers to entry and predictable cash flows, while preserving the ability to actively influence outcomes through majority or co‑control positions and long‑term partnerships. It also shapes exit options. Assets that have grown and de‑risked within the lower mid‑market naturally transition into a broader buyer universe over time. This includes larger infrastructure funds, strategic buyers and long‑term holders. Liquidity is enhanced rather than constrained.

Final thoughts…

The infrastructure required to support Europe’s changing economy won’t be delivered solely by megaprojects or flagship assets. It will be built incrementally, through thousands of local decisions across infrastructure systems. It will also be shaped by those who can combine agility, results, and local insight to deliver measurable outcomes – especially as policy and competitiveness trends continue to evolve.

Small- and mid-cap investors operate at the interface between policy ambition and practical delivery. As such, they’re uniquely positioned to support European competitiveness and decarbonisation.