Resilience in Investments: A Winning Strategy
In a volatile market, resilience is the key to success. Tom Goossens from CVC DIF reveals a powerful insight: the most successful investments exhibit a unique blend of scale, flexibility, and growth potential, allowing them to weather any storm.
In today's economic climate, where the cost of capital is soaring, investors are seeking stability and resilience. Tom Goossens, a partner at CVC DIF's infrastructure funds, emphasizes that winning investments are characterized by their operational flexibility and ability to adapt to adverse conditions. But here's the twist: they also possess the potential for further growth.
The traditional infrastructure sector is undergoing a transformation to adapt to higher interest rates, fierce competition, and shifting political landscapes. So, what sets the most resilient investments apart in this new environment?
The secret lies in the owners' approach. When higher rates make borrowing costly, the impact of past investment decisions becomes evident. This has been a harsh lesson for some, highlighting the importance of building resilience in infrastructure investing.
And this is where it gets interesting: sponsors are returning to fundamental principles—prudent capital structures, robust asset bases, and top-tier management. Winning assets are those with inherent value and clear paths to enhancement.
Take district heating, for instance. Despite being a mature, slow-growing sector, investors appreciate its yield and stability. The most successful operators transform these assets into multi-product offerings, such as energy-as-a-service, to diversify revenue streams.
CVC DIF owns several such companies, including Loimua in Finland, which has successfully expanded into industrial heating systems with long-term, inflation-linked contracts.
Integrated utilities and transportation investments have thrived due to these strategic adaptations.
But what about the impact of geopolitical shifts? CVC, with its global presence across 30 offices, is well-versed in navigating regional complexities.
Geopolitical changes have indeed influenced investor preferences. Italian investments, once offering higher returns than their French counterparts, now see risk premiums converging.
In the US, tariff, inflation, and policy uncertainties have heightened scrutiny.
Canada, with its predictable regulatory environment, continues to attract strong deal flow, despite currency risks. CVC's recent acquisition of SBA Canada, a telecom tower portfolio, aims for mid-teens IRR through operational improvements.
CVC is also exploring new territories and sectors, such as district cooling in Abu Dhabi.
Amid policy uncertainty, investors are increasingly favoring European assets and diversification.
Has the leverage game changed? Absolutely. Pre-2022, liquidity was abundant, and financing terms were lenient. Sponsors had to exercise discipline. Now, leverage is approached with caution, favoring lower gearing, longer tenors, and interest-rate hedging.
CVC DIF's strategy is to prioritize operational strength, followed by financial optimization. Initially, lower leverage is employed to establish track records before optimizing capital structures.
This approach has attracted significant lender interest and facilitated successful refinancings.
But how does a challenging market affect innovation? Adversity, whether from macro challenges or intense competition, demands adaptability. In the Nordic district heating market, aggressive pricing prompted CVC DIF to change course, acquiring a UK developer and creating a Nordic-style platform in the UK.
Operational flexibility is key; single-asset PPPs have limited room for maneuver.
Mid-market operators, CVC DIF's focus, demonstrate agility and can outperform larger competitors.
The principles of discipline, creativity, and operational excellence remain timeless. By embracing these, investors can confidently navigate market cycles.
This interview offers a fascinating insight into the evolving world of infrastructure investing, where resilience and adaptability are the new currency. And it leaves us with a question: in a rapidly changing market, how can investors strike the perfect balance between tradition and innovation?
This article is based on an interview with Tom Goossens, originally published in Infrastructure Investor in December 2025.
