In Infrastructure Investor, Morgan Stanley Infrastructure Partners argues that institutional capital is increasingly moving toward mid-market infrastructure because mega-fund competition has made large-cap deals less attractive.
- Mid-market is defined here as funds of $3bn–$7bn and assets below $1.5bn enterprise value.
- Morgan Stanley claims sub-$3bn deals have outperformed $5bn+ deals by 200–300 basis points on average.
- Bilateral sourcing, family-owned carveouts, and take-private opportunities are cited as key alpha sources.
- LPs are also increasingly focused on DPI (cash returned), where mid-market may have an edge.
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