Gravis Capital Management, the expert investment manager in private credit, infrastructure, and real estate, has released its outlook for 2026, anticipating a year defined by policy execution in infrastructure, continued resilience in private credit, and significant value unlocking in UK listed property.
In sharing the following insights, key members of the Gravis investment team highlight that while volatility may persist, strategic investment in real assets provides an appealing combination of income, resilience, and upside potential for investors seeking diversification.
Infrastructure: from policy ambition to project action
Gravis views 2026 as a pivotal year for UK infrastructure, moving from ambitious government visions to tangible execution.
Philip Kent, CEO of Gravis and Investment Adviser to GCP Infrastructure Investments Limited, notes, “Following a phase where policymakers articulated critical needs, the coming year should see the delivery of key legislation which should bring forward capital expenditure programmes and evolving procurement models”. The government’s 10-year infrastructure strategy highlights the need for substantial private sector investment, amounting to £500 billion over the next decade, in addition to the Government’s promised £725 billion.
Regulatory milestones are underpinning the immediate need for significant capital deployment. Shayan Ratnasingam, Senior Research Analyst, points to vast investment requirements across essential sectors. He highlights Ofwat’s record £104 billion capital expenditure determination for the water sector’s next five-year regulatory period, addressing the ageing infrastructure. Additionally, Electricity Transmission operators are set to invest over £70 billion by 2031 to modernise the grid, crucial for connecting cheaper power and managing rising electricity demand.
Ratnasingam adds that policy clarity in areas like zonal pricing for renewables and reforms around future Contract for Difference (CfD) auctions, the grid connection queue, and planning should reinforce support needed to meet 2030 targets for offshore wind, solar, and onshore wind capacity. Furthermore, new initiatives like the delivery of AI Growth Zones and targeted support mechanisms for data centres will encourage broader infrastructure investments in local communities.
“Policy has laid the groundwork — now we need delivery,” Kent said.
For investors, infrastructure maintains its core role, offering defensive, non-correlated returns, with many investment trusts currently trading at attractive levels, offering a 500 to 600 basis point income pickup over the 10-year gilt.
Private credit: resilience, mid-market strength and the rise of asset-backed lending
For 2026, the team expects borrowers to continue favouring private lenders who can offer certainty and speed. Although syndicated loan markets have recovered, private credit remains the preferred route for many sponsors — particularly in the mid-market where banks remain constrained.
Albane Poulin, Head of Private Credit, anticipates that asset-backed financing will grow faster than traditional cash-flow lending, driven by momentum in energy, social, mobility, and digital infrastructure. “The best opportunities for 2026 are focused on mid-market infrastructure debt, which offers superior risk-adjusted returns,” she said. “This segment focuses on smaller, more complex projects that tend to be less crowded and provide higher spreads, roughly between 350 and 550 basis points.”
Poulin notes that bilateral transaction structures are critical, as they allow lenders to tailor financing to specific projects and move faster than syndicated deals, providing developers with essential structuring support.
She added that emerging decarbonisation themes — including batteries, agrivoltaics, sustainable food, EV charging and digital infrastructure — are expected to feature prominently in 2026, offering attractive returns with more measurable ESG impact.
For investors seeking contractual, inflation-resilient returns and downside protection, private capital is positioned to become the long-term solution for closing the infrastructure financing gap.
UK real estate: prime scarcity and improving conditions
UK listed real estate enters 2026 with a more supportive macro backdrop, benefiting from expected interest rate cuts, falling inflation, and easing bond yields. Matthew Norris, Head of Real Estate Securities, highlights the continued interest from private equity in high-quality platforms, which, alongside REIT mergers, is expected to continue the M&A activity seen in 2025.
Among the Fund’s four mega trends, Norris highlights urbanisation as an area of compelling value, while James Peel, Senior Research Analyst, points to the ageing population theme as a steady core, underpinned by demographic demand and supportive health-sector policy.
Peel also points to the increasing dominance of high-quality, well-located assets, stating that “prime remains the only game in town”. Stock remains in short supply across crucial subsectors like logistics, care homes, and London offices, “a dynamic expected to keep rental growth ahead of inflation,” he said.
Despite strong underlying fundamentals, UK REITs continue to trade close to a 30% discount to net asset value, presenting an attractive entry point. Combining expected dividend growth of around 4% or more with the sector’s historical low correlation to equity markets, UK listed property provides a critical building block for investors seeking diversification and predictable income.
