Investors shift focus from US infrastructure to Europe and Asia amid policy uncertainty

A year into the second Trump administration institutional investors are reassessing the United States as a destination for infrastructure capital, shifting allocations toward Europe and parts of Asia amid policy-driven uncertainty and comparatively more attractive valuations overseas.

Infrastructure Investor’s LP Perspectives survey recorded a notable swing: those signalling greater interest in North America fell from 31 percent in 2025 to 17 percent in 2026, while the share of respondents expressing reduced or no appetite for the region doubled to 20 percent. The change reflects a sequence of policy moves in Washington that have unsettled some foreign investors and altered the economics of US renewable projects.

The administration’s early actions , including a ban on onshore and offshore wind development on federal lands, tariffs and a high-profile stop-work order on Equinor’s Empire Wind I project that had already secured $1.5 billion in project finance , have raised questions about permitting certainty and the durability of prior incentives. Renewable energy tax credits were also curtailed from July 2026 and new sourcing and permitting requirements have tightened the build-out case for some technologies in the US. According to interviews and market participants, those measures have prompted certain European limited partners to trim, at the margin, their US weightings rather than execute abrupt reallocations.

“Of course, you can’t just start cutting exposure to private markets overnight,” Jeppe Starup, head of private capital and real assets at Danish pension fund PenSam, told Infrastructure Investor in October. He said large private-market positions are slow to adjust and that portfolio changes tend to be gradual and tactical. Christian Wiehenkamp, chief investment officer at German family office Perpetual Investors, told the same publication his firm has moved from placing three or four of every five infrastructure investments in the US to “now it will be more like two-ish,” underscoring a deliberate tilt toward broader geographic diversification.

That reorientation is evident in survey responses. Interest in Western Europe surged, with 42 percent of LPs indicating greater appetite for the region in 2026 versus 25 percent the prior year. State Street’s institutional research similarly finds growing enthusiasm for developed European infrastructure, reporting 57 percent of surveyed LPs plan to invest there in 2026, up from 44 percent in 2025. Europe’s pull is being driven by a combination of relatively lower asset valuations compared with the US, clearer policy frameworks for renewables in many countries, and strong fundraising by European managers.

Fundraising figures support the trend. Infrastructure-focused vehicles targeting Europe attracted the largest pools of capital in 2025, according to market data, and high-profile raises from established managers have reinforced LP confidence. Analysis published by legal and industry observers notes that more than 80 percent of 2025 infrastructure fund commitments were directed towards Europe and that major vehicles , including multibillion-euro funds launched by established private capital groups , point to a durable expansion of European private infrastructure capacity. Preqin forecasts cited by industry commentators project that European private infrastructure assets under management could exceed North American levels by 2030.

For North American public pensions and other large allocators, the response has been nuanced rather than wholesale retreat. The New Mexico State Investment Council, which was among the most active non-multilateral LPs in 2025, said it favours larger, high-quality global platforms that provide scale and balanced geographic exposure. “We like the global exposure,” Keith Sabel, director of real estate and real assets at NMSIC, explained to Infrastructure Investor, noting the council’s intention to reduce a circa-65 percent US tilt over time.

Not all LPs view the US policy shift as a deterrent. Petya Nikolova, deputy chief investment officer and head of infrastructure investments for the New York City Comptroller’s Office, characterised the recent actions as reducing uncertainty about likely policy outcomes and said long-term investors can respond with sectoral, rather than purely geographic, differentiation. Some managers are recalibrating underwriting assumptions to reflect new permitting regimes and supply-chain constraints instead of abandoning US markets entirely.

Asia is also on LP radars. Infrastructure Investor’s survey showed 19 percent of respondents expressing increased interest in developed Asia-Pacific in 2026, up from 14 percent in 2025. Institutional reports from HSBC and others note a rising appetite for value-add infrastructure strategies and for markets offering secular growth in digital, energy transition and transport sectors. However, some LPs caution that local expertise matters: Perpetual’s Wiehenkamp questioned whether US-headquartered managers are the best vehicle to access Asian opportunities and said emerging local platforms warrant closer attention.

Currency dynamics and macro concerns remain part of the calculus. Canadian and other non‑US LPs highlight exchange-rate considerations and the need to manage swap costs when repatriating cash flows, while industry polling shows interest-rate movements and trade policy have moved to the top of LP risk priorities in 2026, displacing geopolitical uncertainty as the single dominant worry recorded in 2025.

Despite the reallocation trends, market participants emphasise that the US continues to offer compelling operational expertise, deal-sourcing depth and buy-and-build strategies that many investors find attractive. Lincoln Webb, global head of infrastructure and natural resources at British Columbia Investments, said political interventions and tax changes are risks that can be priced into underwriting and that shifting global dynamics may create fresh opportunities, including projects that enhance trade resilience and food security.

The net effect is a more balanced global appetitive map for infrastructure capital. Europe’s narrative as a leading destination for private infrastructure investment has strengthened, Asia’s prominence is growing, and the US remains a central , if now more cautiously approached , market. For many LPs, the immediate response has been measured: modestly lower US exposure, increased emphasis on geographic diversification and greater selectivity by sector and manager, rather than a full-scale flight from America.