A Resurgent M&A Market and Emerging Trends in Industrial Innovation and Flexible Sponsor Financing

M&A activity is on the rise with a focus on opportunistic add-ons in the mid-market, upper mid-market and an anticipated large cap resurgence to come. Loans will continue to be supported by private credit lenders (who now have deep reserves of dry powder) and who are keen to deploy capital and become solutions providers for sponsors on a relationship basis.

Concurrently, the world is witnessing a surge in industrial innovation with advancements in industrial products and new agricultural technologies, alongside the growing demands for AI, energy and data centres that underpin modern digital life. This trend suggests a potential boom in industrially innovative assets such as 3-D printing, agri and aqua, as well as the more ’traditional‘ data centres and power generation businesses. However, what is key to this future business environment is that the evolution in the definition of infrastructure and type of investor allocating to this sector is broadening, with dynamic sponsors and corporates seeking to allocate to a sector that was once the preserve of fixed developers and traditional project financing banks.

Key Considerations in 2025

Industrially Innovative Assets to Become the ’Next‘ Big Thing

Opportunistic Add-Ons

Expanding the Definition of Infrastructure and Increasing Flexibility of Sponsor Structures

Five years ago when someone said ’infrastructure‘ they meant an extremely large static and regulated asset (a power plant, airport or similar) financed on a very-lender friendly basis. Now, sophisticated and dynamic sponsors are searching for returns across the full universe of structures and strategies. From aqua to agri and digi to energy, sponsors are creating flexible groups that can take advantage of an expanding asset class by having the flexible financing that permit them to buy and build—just like a normal PE portfolio.

Transition Financing Replacing Pure ’Green‘ Financing

Investors are naturally more aware of the pitfalls of greenwashing. Where once it was relatively straightforward to raise debt and label it as ’green‘, borrowers now have to demonstrate the true underlying credentials of the business opportunity for the market to clear their deals. Accordingly, a market opportunity is opening up in financing the transitional steps needed to improve the sustainability of legacy assets but on a ’transition‘ and not fully ’green‘ basis.

Trends and themes to act on

Explore Industrially Innovative Assets: Position your portfolio to capitalise on the next big industrial asset class boom.
Capitalise on Opportunistic Add-Ons: Leverage the resurgence in M&A volumes by focusing on opportunistic add-ons in the mid-, upper-mid and large cap market. We can help you navigate partnering with trusted lender groups to identify and acquire best-in-class targets that will drive growth and value.
Expand and Flex Your Infrastructure Investments: Adapt to the evolving definition of infrastructure (from education to healthcare to battery storage to ski resorts) by exploring dynamic and flexible financing structures. Invest in a diverse range of assets to maximise returns and build a robust portfolio through financing flexibilities you already enjoy in your other asset classes.