In an era where financial storms seem to rage endlessly, the real game-changers in investing are those assets that not only survive but thrive through adversity—building resilience that turns challenges into opportunities. It's a captivating idea, isn't it? But here's where it gets controversial: Are we sacrificing short-term gains for long-term stability, or is this the smarter path forward? Let's dive into this insightful keynote interview with Tom Goossens of CVC DIF to unpack how winning investments are crafted for endurance.
Picture this: Top-tier investments have a unique blend of size, adaptability, and room for expansion that equips them to withstand tough times, as highlighted by Tom Goossens, partner and co-head of CVC DIF’s infrastructure funds. With borrowing costs climbing for everyone, there's a fresh focus on stable, tough investments and a smarter use of borrowed money. Successful investments often boast operational nimbleness, untapped growth avenues, and the ability to adjust when the going gets rough, Goossens explains.
The infrastructure landscape is transforming to tackle rising interest rates, fierce rivalry, and a reshaped political arena. Think of traditional infrastructure assets evolving to meet these new realities—it's like old-school systems getting a modern upgrade.
So, what exactly sets apart the investments that have held strong in this new world of higher interest rates? Before we zoom in on the assets themselves, we need to examine the people calling the shots: the owners. When borrowing becomes pricier, the ripple effects of earlier choices hit faster. For many, this has been a stark wake-up call that investing in infrastructure is really about forging resilience. And this is the part most people miss—it's not just about the bricks and mortar; it's about the strategy behind them.
Investors are circling back to fundamentals: cautious financial setups, robust underlying assets, and top-notch management teams. Standout assets come with built-in value right from the start, plus clear routes to boost that value further. Take district heating, for example—a sector that's established but grows slowly. What draws investors? The reliable returns and steadiness. The top players in this space broaden their offerings into multi-service packages, like energy-as-a-service deals, which mix up revenue streams and make things more stable. CVC DIF owns several such gems, including Loimua in Finland, which has branched out into industrial heating solutions secured by long-term contracts that adjust with inflation. This kind of diversification is key, helping to weather economic ups and downs.
Similarly, combined utility and transport investments have shone brightly thanks to their inherent strengths. For beginners wondering what this means, think of utilities as the backbone of everyday services like water and electricity, often bundled with transportation networks for efficiency and resilience.
Now, shifting gears—how has the evolving global political scene shaken up the industry? CVC, with its network of 30 offices worldwide, is no stranger to handling regional twists and turns. These geopolitical shifts have reshaped what investors look for. Italian projects used to fetch higher rewards than their French counterparts due to perceived risks, but now those risk premiums are aligning. In the US, factors like tariffs, inflation, and policy unpredictability have ramped up scrutiny. On the flip side, Canada offers robust deal activity with more predictable regulations, though currency fluctuations add a layer of uncertainty. CVC's recent purchase of SBA Canada—a telecom tower network ripe for upgrades—aims for impressive mid-teens internal rates of return (IRR, which is a measure of investment profitability over time). They're also eyeing nearby regions and fields, such as district cooling in Abu Dhabi. Appetite is tilting toward European holdings and spreading investments to hedge against policy volatility.
But here's where it gets controversial again: Is this shift toward Europe a smart hedge or just avoiding US uncertainty? Some might argue it's overcaution, while others see it as prudent diversification. What's your take?
Has the way we handle borrowing—leverage—shifted in response? Absolutely. Before 2022, money was flowing freely with lenient lending rules, so sponsors had to enforce their own restraint. Fast-forward to now, and leverage is treated with more care: reduced borrowing levels, longer repayment schedules, and protections against rate hikes. CVC DIF leads with strengthening operations first, then fine-tunes the finances. In the early stages, they keep leverage light to establish a solid track record before optimizing. This approach has drawn strong lender support and enabled smooth refinancings.
How do tough market conditions affect a company's capacity to grow and innovate? Adversity might stem from big-picture economic woes or cutthroat competition. In the Nordic district heating arena, pricing got so fierce that CVC DIF pivoted—snapping up a UK developer and creating a Nordic-inspired platform there. Flexibility in operations lets businesses adapt; single-asset public-private partnerships (PPPs, which are collaborations between government and private sectors for infrastructure) often lack that maneuverability. Mid-sized operators, like those CVC DIF targets, offer agility that lets them outpace bigger players. And this is the part most people miss: It's not size that wins; it's responsiveness.
Finally, how is the mix between old-school infrastructure and fresh operational approaches changing? Investors are warming to versatile, multi-role companies. Waste management is a prime example: evolving from isolated PPP projects into holistic operations covering everything from pickup to recycling. Waste-to-energy opportunities are expanding, with the market now better at valuing complexity. What was once straightforward 'core' infrastructure now blends into 'core-plus'—adding flexibility and growth options without piling on extra risk.
At the heart of it all, timeless principles remain: disciplined strategies, inventive execution, and the unbeatable power of operational prowess to drive value. Grounded in these, investors can sail confidently through market cycles.
This piece was originally featured in Infrastructure Investor (https://www.infrastructureinvestor.com/cvc-dif-building-on-resilience-pays-off/) in December 2025.
Download PDF (https://www.cvc.com/media/pjrb4cvn/keynote-interview-building-on-resilience-pays-off.pdf)
What do you think—does resilience trump high-risk, high-reward strategies in today's volatile world? Or is there a place for bold bets? Do you agree that operational excellence is the secret sauce for long-term success? Share your thoughts in the comments and let's spark a debate!
