In a recent statement, ClearBridge Investments identified what it views as one of the most powerful intersections of policy and technology seen in decades, culminating in a multi-decade investment opportunity in listed utilities.
Owing to the combined effects of accelerating legislative change and the surging electricity demands of artificial intelligence, it views the sector as primed for long-term growth.
As Charles Hamieh, portfolio manager at ClearBridge, explained, new legislation in the United States and evolving fiscal priorities in Europe are transforming infrastructure funding, with significant implications for listed infrastructure.
“We are entering one of the most significant periods of change for infrastructure policy in decades,” Hamieh said.
“These changes are redefining, sometimes subtly, sometimes dramatically both how projects are financed and how quickly asset bases are growing.”
He noted the Trump administration’s One Big Beautiful Bill (OBBB), which he said has restructured aspects of the Inflation Reduction Act, simultaneously discouraging incentives for renewables, while providing developers with a stable, front-loaded period to secure tax credits.
While he conceded that the OBBB narrows the scope of policy stimulus, he said it still avoids major setbacks for renewables.
“What it lacks in scale, it makes up for in stability,” Hamieh said, adding that utilities and renewable energy companies with strong balance sheets and resilient supply chains could stand to gain an advantage.
Meanwhile, he said that Europe is moving in the opposite direction following NATO’s June summit, when member nations pledged to increase their defence and security-related spending target from 2 to 5 per cent by 2035.
As Hamieh explained, this translates into potentially €2 trillion of infrastructure spending over the next decade and a half, ranging from resilient energy grids for military bases to new transport corridors.
He added that Germany’s March announcement of a €500 billion fiscal package is also set to see infrastructure investment in energy, utilities and transportation experience a significant boost.
ClearBridge also identified a distinct global shift whereby private capital is assuming the role traditionally held by governments, with corporate balance sheets and institutional investors stepping in to fill a major role in infrastructure financing. As a result, the asset bases for both regulated utilities and contracted infrastructure are experiencing rapid expansion.
As Hamieh explained, technological advancements are rapidly accelerating this dynamic, with the surge in AI-driven data centres and cloud computing fuelling an “unprecedented surge” in power demand.
For instance, a single hyperscale data centre now consumes as much electricity as 80,000 homes, according to Hamieh.
In turn, he said this necessitates a substantial capital investment in the generation, transmission and integration of new technologies, creating a “structural growth runway” for listed utilities.
Last week, Stefan Stoev, a global equity analyst at Talaria Capital, similarly identified utility companies as an attractive investment going forward.
At the time, Stoev told InvestorDaily that given current tariff and debt risks, alongside the recent Fed rate cut pivot, the prospect of high inflation was probable – making short-duration assets like utilities more appealing.
Looking back at the past decade, the pace of utility growth has already doubled during that period – with asset base expansion rates climbing from 4 to 5 per cent annually to 8 to 10 per cent today. Hamieh said he expects this could rise to 12 to 15 per cent by the early 2030s, with levels likely to stay high.
He concluded that for investors, listed utilities across the globe are “uniquely positioned to benefit” from the confluence of policy and technology advancements.
“The winners will be companies with the financial strength, operational capability and strategic foresight to stay ahead of the policy curve,” he said.
