Template

Infrastructure Fund Due Diligence Checklist

An infrastructure checklist for regulatory exposure, concession risk, leverage, inflation linkage, and long-duration asset quality.

What this template is for

Infrastructure diligence focuses on long-duration cash flows, regulatory frameworks, concession or contract risk, leverage, inflation linkage, and where the strategy sits on the risk spectrum from core to value-add. This checklist helps LP teams distinguish durable infrastructure cash flows from assets that only look defensive in a marketing deck.

When LP teams use it

Core infrastructure open-ended fund evaluation
Core-plus or value-add closed-ended fund evaluation
Energy transition infrastructure fund evaluation
Digital infrastructure fund evaluation
Transportation, utilities, renewable power, midstream, social, or communications infrastructure evaluation
Emerging markets infrastructure fund evaluation
Re-up evaluation for an existing infrastructure manager
IC preparation for an infrastructure fund commitment

The template

Strategy and sector

Core, core-plus, value-add, opportunistic, or greenfield
Open-ended or closed-ended structure
Brownfield vs. greenfield exposure
Sector mix: transportation, utilities, energy, renewables, digital, social, midstream, communications, waste, water
Geographic concentration
Developed markets vs. emerging markets exposure
Regulated vs. contracted vs. merchant exposure
Essential-service characteristics
Asset life and remaining useful life
Control vs. minority ownership
Platform strategy vs. single-asset exposure
Where this fund sits in the firm's product set
What makes the strategy hard to replicate
What market environment would make this strategy struggle

Portfolio fit

Role this manager would play in our portfolio
Existing exposure to this GP or related infrastructure strategy
Overlap with current infrastructure or real assets managers
Sector exposure created by this commitment
Geographic exposure created by this commitment
Expected income vs. appreciation contribution
Expected inflation sensitivity
Expected duration and liquidity profile
Vintage-year exposure context
Commitment pacing impact
Recommended commitment size and rationale
What the portfolio loses if we pass
What risk the portfolio takes if we commit
Re-up view: increase / maintain / reduce / pass / undecided, if applicable

Cash flow profile

Yield component vs. capital appreciation
Contracted revenue percentage
Regulated revenue percentage
Merchant revenue percentage
Counterparty quality on contracts
Remaining contract life
Concession length and renewal risk
Volume and demand risk
Availability-based revenue exposure
Take-or-pay or minimum-volume protections
Revenue escalation terms
Operating cost pass-through rights
Inflation linkage: regulated, indexed contract, pass-through, or implicit
Lag between inflation and revenue adjustment
Revenue downside case
Distribution policy
Expected cash yield vs. total return

Inflation linkage and pricing power

Source of inflation protection
Contract index used: CPI, RPI, PPI, tariff formula, other
Frequency of inflation adjustment
Caps, collars, or floors on inflation pass-through
Regulatory approval needed for tariff increases
Ability to pass through operating costs
Ability to pass through capex
Historical evidence of inflation pass-through
Inflation linkage by asset or sector
Mismatch between inflation-linked revenue and fixed-rate costs
Mismatch between inflation-linked revenue and floating-rate debt
Cases where inflation pass-through failed or was delayed

Regulatory and political exposure

Regulated revenue exposure by jurisdiction
Key regulator or public authority
Regulatory reset schedule
Recent regulatory changes affecting strategy
Tariff-setting and allowed return framework
History of adverse regulatory decisions
Political risk in target geographies
Public-private partnership framework, if applicable
Concession-granting authority
Expropriation, nationalization, or contract-renegotiation risk
Permitting and community or stakeholder opposition risk
Local-content, labor, or foreign ownership requirements
Currency convertibility or repatriation risk, if applicable
How the manager monitors regulatory change

Concession and contract risk

Concession start and end date
Remaining concession life
Renewal process and renewal history in jurisdiction
Termination rights and compensation on termination
Change-in-law and force majeure provisions
Performance obligations and minimum capex requirements
Maintenance and handback obligations
Penalties for underperformance
Counterparty default protections
Contract concentration by counterparty
What happens if the concession is not renewed

Sourcing and acquisition discipline

Sourcing channels
Proprietary vs. auction process mix
Government, utility, sponsor, corporate, or developer relationships
Partnerships with operators or developers
Pipeline size vs. actual deployment
Deals won and why
Deals passed on and why
Entry valuation discipline (EV/EBITDA, cap rate, yield, sector basis)
Control premium paid, if any
Competition from strategics, corporates, pension funds, sovereigns
Evidence that sourcing advantage is repeatable

Operational capability

In-house operating partners or external operators
Asset management depth
Engineering and technical capability
Construction and development expertise
Regulatory affairs and commercial contracting expertise
Power marketing or offtake expertise, if applicable
Procurement and maintenance planning
Health, safety, cyber, and physical security process
Operating KPI reporting by asset
Examples where operating capability created value
Examples where operating plans missed expectations

Construction and greenfield risk, if applicable

Greenfield exposure limit
Development stage at acquisition
Permitting, land rights, and interconnection status
EPC contract type and contractor quality
Fixed-price or cost-plus exposure
Construction budget and contingency reserve
Delay and cost overrun history
Completion guarantees
Revenue start-date assumptions and ramp-up risk
Technology risk
Completed projects vs. budget and timeline

Leverage and capital structure

Asset-level leverage by sector
Fund-level leverage policy
Target and maximum loan-to-value
Fixed vs. floating-rate debt mix
Interest rate hedging
Debt maturity and refinancing schedule
Debt service coverage ratio and covenants
Project finance structure; recourse vs. non-recourse
Construction debt exposure
Currency and inflation mismatch between debt and revenue
Subscription line and NAV facility use
Stress case under higher rates, lower demand, or delayed refinancing
How leverage contributed to historical returns

Valuation and marks

Valuation policy, frequency, internal vs. third-party
Valuation committee composition
Discount rate methodology and terminal value assumptions
Inflation, demand, volume, and commodity assumptions
Regulatory reset assumptions
Comparable transaction support
Treatment of greenfield and delayed or impaired assets
History of write-downs
Realized exits vs. prior marks
Sensitivity to discount rate changes
Valuation transparency in reporting

ESG, energy transition, and physical risk

Energy transition and legacy energy exposure
Carbon intensity by asset or sector
Transition risk from policy, technology, or demand changes
Physical climate risk: flood, wildfire, heat, storm, drought
Environmental permitting and biodiversity or land-use concerns
Community impact, labor, and safety practices
Human rights or supply-chain considerations
Decommissioning obligations and environmental liabilities
Insurance availability and cost trends
ESG, mission, exclusion, or policy constraints relevant to the LP

Performance

Gross and net IRR, TVPI, DPI by fund
Yield vs. capital appreciation split
Realized vs. unrealized performance
Cash yield by vintage and distribution stability
Performance through regulatory, commodity, and rate cycles
Performance by sector, geography, and asset type
Loss ratio by asset
Top-asset concentration of returns
Benchmark comparison: infra-specific, CPI-plus, public or private infra benchmarks
Performance excluding the top one or two assets
Leverage-adjusted performance
Attribution: yield, multiple expansion, operations, leverage, inflation, FX

Terms specific to infrastructure

Management fee rate and basis
Fee basis during and post investment period
Carry, hurdle, catch-up, and waterfall
GP commitment
Fund term and extension rights
Recycling, co-investment, and key-person provisions
Removal, LPAC, valuation, reporting, and ESG reporting rights
Open-ended redemption terms, if applicable
Side letter asks
Any terms that deviate from market

Operational due diligence

Fund administrator, auditor, counsel, tax advisor, valuation provider
Operating partner, engineering, and regulatory advisor relationships
Compliance program and CCO
Cybersecurity and business continuity
Conflicts, allocation, and related-party transaction policy
Insurance coverage
Environmental review process
Anti-bribery, corruption, and sanctions controls
Past or pending litigation, regulatory, environmental, or compliance matters

References

On-list and off-list LP references
Operating partner and joint venture partner references
Lender references
Regulatory or public authority references, if available
Technical advisor and former employee references
Feedback on asset management quality and regulatory judgment
Feedback on construction execution, if applicable
Feedback on communication through stress
Feedback on valuation transparency

Re-up specific questions, if applicable

What changed since the prior fund
Has the strategy moved up the risk spectrum
Have sector, geography, fund size, or leverage shifted
Has merchant, greenfield, or development exposure increased
Has regulatory exposure or valuation discipline changed
Did prior assets perform for the reasons we underwrote
Were cash flows and distributions durable
Did the manager communicate well through regulatory, rate, or commodity stress
Increase, maintain, reduce, or pass
What would make us not re-up

Red flags and mitigants

'Core' label with meaningful merchant exposure
Concession renewal assumed rather than underwritten
Inflation linkage claimed but capped, delayed, or discretionary
High floating-rate leverage without adequate hedging
Near-term refinancing risk
Regulatory reset risk not reflected in downside case
Greenfield exposure without demonstrated construction track record
Commodity price exposure hidden inside contracted revenue
Concentration in one sector, geography, regulator, or counterparty
Valuation marks unsupported by transaction evidence
Energy transition risk in legacy assets
Political or permitting risk understated
Open-ended liquidity terms mismatched to illiquid assets
Related-party operator or fee conflicts
For each: severity, manager explanation, LP team view, mitigant, owner, status

Final diligence conclusion

One-paragraph investment view
Primary reason to invest
Primary reason not to invest
Biggest underwriting question
Biggest regulatory, concession, or leverage question
Open diligence items
Recommended commitment size
Recommendation: proceed / proceed with conditions / defer / pass
Conditions to close
Items to monitor after commitment
Reviewer confidence level

Common mistakes

Underweighting merchant and refinancing risk in 'core-plus' labels
Treating concession renewal as automatic
Crediting inflation linkage without reading the contract
Ignoring energy transition exposure in legacy energy portfolios
Mixing regulated and merchant assets in a single 'core' bucket
Ignoring regulatory reset schedules
Underestimating construction and permitting risk
Treating contracted revenue as risk-free without checking counterparty quality
Failing to test asset-level leverage under higher rates
Accepting long-duration cash flow claims without downside cases
Ignoring currency, political, and repatriation risk in emerging markets
Not separating yield, leverage, inflation, and valuation effects in performance attribution

How Allocator Desk manages this in a live system

Creates an infrastructure diligence workflow with regulatory, merchant, concession, leverage, inflation-linkage, and construction-risk fields
Tracks concession length, contract maturity, regulatory reset dates, debt maturity, and refinancing schedules by manager and fund
Surfaces inflation-linkage commentary across quarterly letters, annual meetings, and manager updates
Connects regulatory changes, concession events, construction delays, and refinancing updates to the manager monitoring record
Maps ESG, climate, tax, reporting, side letter, and co-investment terms into the obligations record
Links quarterly monitoring, annual meeting notes, references, and prior IC memos into the re-up decision
Turns infrastructure diligence from a generic real assets review into a searchable record of cash-flow durability, regulatory exposure, and long-duration risk