As we embark on a new year, our Industry Group leaders reflect on the changes spurred by 2020 — stories of novel products and services, shifting market trends, and new M&A strategies — and consider the implications for 2021. Access more industry perspectives in our related insights tab.
Spitzer: For many companies in our sector, activity levels haven't been impacted by COVID-19 or the resulting downturn. That's true for infrastructure markets, broadly speaking, which have been resilient across all of the vertical subsectors in which we're active. There are several factors at play in that resilience, including aging roads, bridges, and grid components. There's also growing demand for data across the global economy, which drives steady demand for telecom-related services.
White: Going forward, we think infrastructure will continue to benefit from investments in new utility infrastructure and the ongoing maintenance and replacement of the aging grid. Private equity has been very active in these markets, building platforms in electric, gas, water, and telecom maintenance services, testing and inspection services, underground locating, geospatial services, and substation services. Each of these areas is experiencing significant long-term demand for maintenance and support.
Spitzer: We're also excited about new opportunities related to the energy transition, whether they involve using less energy, using more renewables, or operating more sustainably overall. We've seen especially strong activity in energy management, particularly in businesses focused on energy efficiency, demand response, and ancillary energy management services.
Likewise, the transition to renewable energy and sustainability has resulted in a greater focus on smart grid management—helping to ensure that renewable resources deliver a steady and predictable supply of power. This focus is driving demand for software and service providers, residential and commercial and industrial (C&I) installers, and operations and maintenance (O&M) platforms.
White: These are all areas with steady, long-term tailwinds that tend to weather disruptions well. And they reflect where the industry is going—greater efficiency, more productivity, and overall, a more sustainable, flexible grid. Likewise, in the case of energy management companies, which use various approaches to help customers use energy more efficiently, there's typically a solid business case for undertaking a project, even during a downturn.
Spitzer: We also expect the new administration to be an active supporter of the energy transition, and to support additional investments in that area. Considering investors' growing impetus to incorporate environmental, social, and governance (ESG) considerations into their strategies, we expect this to continue to be a thriving part of our industry. The opportunities range from helping traditional oil and gas companies operate more efficiently and cleanly to developing wind farms, and there are plenty of opportunities for successful investments.
Click here to explore our experience in the energy, power and infrastructure industry.
Which aspect of "regular life" are you most excited about returning to?
White: Getting back together as a team. As hard as we work, it's incredibly important to have that camaraderie.
Spitzer: Agreed. There's also an element of face-to-face connectivity with clients. Relationships require personal connections, and it's harder to build and sustain those remotely.