Infrastructure-Investment Binge Will Continue—Even Without Washington

But there’s a distinct possibility that control of the Senate will remain with Republicans, which could make it more difficult for Mr. Biden to enact his agenda. Even if Democrats control both houses of Congress or they manage to agree on a package with Republicans, there is uncertainty over whether it would contain provisions to encourage states and cities to partner with private investors, in part because Democrats have historically opposed privatizing public assets.

In 2016, many investors formulated new strategies around the trillion-dollar infrastructure plan that then President-elect Trump was promising, only to be disappointed when it failed to materialize. That experience has tempered enthusiasm this time around.

“There’s been a significant hope for infrastructure for half a decade now,” DJ Gribbin, who served as President Trump’s infrastructure adviser, said in an interview. “The problem with infrastructure is that everyone says, ‘I would like infrastructure.’ And then you ask them what they mean by that, and they all have different things in mind.”

That hasn’t stopped private infrastructure investment from barreling forward.

This year, there have been $88.9 billion of infrastructure deals in North America through Dec. 8, a decrease over the record $226.5 billion for all of last year, but above the full-year total in 2018, according to Preqin. Among the hottest sectors have been digital and communications infrastructure, renewable energy and ports—areas that have thrived without much government support.

More is sure to come. Private-equity firms have already broken records in 2020 for North America-focused infrastructure fundraising, raking in $52.3 billion so far, Preqin data show. That’s $1 billion more than they raised in all of 2019, the previous record, and puts total unspent cash earmarked for infrastructure investment in the region at $102.8 billion.

Broadband assets have been in demand as the shift toward working from home during the pandemic has highlighted their importance. Last month, Stonepeak Infrastructure Partners announced a deal to buy Astound Broadband, the sixth-largest U.S. cable-TV provider, for $8 billion including debt.

Competition for renewable-energy assets also has become heated as pension funds and other institutions move toward environmentally responsible investing and away from fossil fuels. In November, KKR KKR 0.52% & Co. said it was investing about $1.4 billion in portfolios of wind and solar assets. It also signed a letter of intent to invest $900 million in future renewable-energy transactions with a subsidiary of NextEra Energy Inc. NEE 0.83%

“Power and renewables has been very big, despite an administration that has not necessarily supported it,” said Nasir Khan, head of infrastructure for the Americas at French investment bank Natixis SA NTXFY 2.30% . “People see it as a natural progression.”

While many firms are now wary of fossil-fuel bets, a few have made contrarian investments in traditional energy assets. In September, Blackstone Infrastructure Partners and Brookfield Infrastructure Partners BIP 0.57% LP closed a deal to buy 42% of natural-gas pipeline owner and operator Cheniere Energy Partners LP for about $7 billion.

There are some areas where investors and advisers say Mr. Biden may be able to act without Congress. For example, he could institute policies that would help expand access to broadband in rural areas, or accelerate the shift toward renewable energy by restoring fuel-economy standards for vehicles and allowing states to set their own climate targets.

Skepticism hasn’t kept firms from compiling a wish list should a blockbuster infrastructure bill come to pass. One often-touted model is that of Australia, where a state or local government sells a public infrastructure asset to private investors and is awarded a bonus from the federal government.

And even if a bill doesn’t include an explicit role for private capital, significant government spending on infrastructure could still open up opportunities for enterprising investment firms to seize on.

Write to Miriam Gottfried at [email protected]