The global energy landscape may be in a complex and transformative age, but it’s exploding with opportunity upon which investors are eager to capitalize.

Global energy consumption, driven by population growth, economic development, energy transition goals and global technology boom is expected to increase electricity demand by 50% annually through 2030 accelerated by the demand for AI computing power.

Renewable energy is in steep demand, creating opportunity for private market investors to step in. Data from the IEA noted that $2.2 trillion would be put into clean energy technologies in 2025. Meanwhile, the oil and gas sector, with a predicted $1.1 trillion investment for 2025, also faces a contradictory outlook, with strong financial performance but mixed expectations for growth as differing geographies commit to or roll back energy transition goals.

Aside from the macroeconomic factors affecting traditional and renewable energy sectors, the energy investment space has also seen exciting change and increased complexity. Portfolios were once dominated by traditional asset classes like listed futures, commodity options, bonds, and equities. Now, the alternatives asset management space has expanded asset managers’ depth and breadth into multi-asset strategies that span physical gas, power, private credit, and public and private asset-based finance.

Through this ever-shifting energy industry and the emergence of new opportunities to generate alpha, it makes sense that asset managers are eager to scale their strategies. However, as the space evolves and becomes more complex, so do investment operations, potentially impacting the growth and returns they’re able to capture. The asset owner and asset management community are aligned in the ability to expand investment coverage by scaling technology and operations in new ways. By mastering their middle- and back-office operations that accompany their asset-class agnostic energy investment strategies, they increase their chances of unlocking and capturing the alpha they are seeking.

Exploring a multi-asset class energy boom

The energy investment space in 2025 is experiencing unprecedented growth and transformation, driven by a convergence of macroeconomic, technological, and policy trends that have unfolded over the past several years. We are still in the early stages of this evolution.

Post-2008 bank regulation

Following the global financial crisis of 2008, sweeping government regulations reshaped the financial landscape and banking’s role as primary lenders. Key regulations such as Dodd-Frank, Basel III, and the Volcker Rule fundamentally changed how banks operate. As a result, private debt managers, hedge funds and private capital managers have stepped into the void, taking on an ever-increasing role in providing finance via public and private markets. This shift has impacted the private markets investing sector broadly, bringing the energy investment sector along for the ride.

The AI boom and its energy consumption implications

Artificial intelligence is revolutionizing how we interact with information across all sectors, driving massive increases in energy demand. Asset managers are increasingly targeting energy infrastructure funds and utility-backed private credit to capitalize on the surge in demand from AI-driven data centers. Asset owners, in turn, are seeking new avenues to gain exposure to this market trend.

Government mandates and incentives (and their rollback)

In the U.S., many federal tax credits supporting business and consumer adoption of solar and other renewables have been rolled back. This has shortened investment horizons and reduced project funding for existing investments, but it has also heightened overall demand for fundraising. With less government support for energy projects, particularly in the U.S., asset managers have had to explore alternative investment vehicles and balance between traditional and renewable energy investments to achieve their outcomes.

Emerging asset classes for energy investment

As a result of these drivers, the energy investment sector has grown and become more complex, with many asset managers adopting a multi-asset class approach to their energy portfolios. Traditional asset classes such as equities, fixed income, and listed commodities remain foundational components of energy strategy deployment.

However, asset managers are broadening their strategies and investing across multiple asset classes, including physical commodities and private credit.

Physical commodities

Sophisticated asset managers are embracing physical commodity investment despite its high operational barriers—such as the need to manage logistics, storage, transport, cash management, and risk management—because it provides direct access to spot exchanges and markets, unlocking new opportunities to generate alpha.

Private credit financing

Asset managers have also stepped in to finance the energy ecosystem, with a growing focus on several vehicles:

• Infrastructure lending: Private credit is increasingly used to fund large-scale energy infrastructure projects—renewable power plants, transmission lines, and data center energy systems—especially as banks retreat from long-duration lending. These deals often require bespoke financing structures and long investment horizons, making private credit a better fit than traditional sources.
• Working capital facilities: Asset managers deploy private credit to support energy companies’ day-to- day liquidity needs, including fuel procurement, equipment maintenance, and payroll. These short-term loans help stabilize operations in volatile markets and are tailored to the unique cash flow cycles of energy businesses.
• Distressed situations: Private credit funds are stepping into distressed energy scenarios— underperforming oil and gas assets or stalled renewable projects—offering rescue financing, recapitalizations, or debt restructuring. These deals often carry higher risk but offer potential for outsized returns and strategic control.
• Structured trade finance: In energy trading and commodity logistics, private credit is used to finance the movement of physical goods. Structured trade finance solutions include pre-export financing, inventory-backed loans, and receivables financing, helping energy firms manage global supply chains and market volatility.

The growth in this investment sector has created exciting opportunities for asset managers, but it has also led to complex portfolios with intricate servicing needs.

Operational challenges in energy investing

Multi-asset class energy funds offer asset managers ample creativity and flexibility in expressing their investment views on this expansive sector, but they also bring significant operational complications.

• Data integration across disparate systems: When energy-focused funds span multiple asset classes, each has its own data sources and formats. Asset managers must integrate real-time data from trading platforms, exchanges, custodians, counterparties, and operational systems to maintain visibility and control across their portfolios.
• Treasury and collateral management: The complexity of energy investments, especially those involving structured finance or commodity trading, requires precise cash flow forecasting and collateral tracking. Managers must oversee margin requirements, optimize liquidity across entities, and ensure capital is deployed efficiently to support both short-term operations and long-term commitments.
• Risk modeling across asset classes: With energy portfolios now including everything from distressed debt to physical commodities, traditional risk models may fall short. Asset managers need cross-asset risk frameworks that account for market volatility, geopolitical exposure, regulatory shifts, and operational risks unique to energy infrastructure and logistics.
• Counterparty exposure management: Energy investing often involves a wide range of counterparties— from utilities and commodity traders to infrastructure developers and sovereign entities. Managers must monitor creditworthiness, settlement risk, and contractual obligations across jurisdictions, especially in volatile or illiquid markets.

If asset managers hope to scale and expand returns, they’ll need to master these operational challenges. A trusted partner like Northern Trust can help.

Northern trust’s strategic advantage in the energy investing space

Northern Trust delivers a strategic advantage for energy asset managers by providing asset class agnostic technology, integrated data sharing, and robust treasury services, helping them to scale confidently.

Asset class agnostic technology

Northern Trust’s Omnium platform is designed to support a wide array of asset classes—including public equities, private credit, structured finance, and physical commodities—within a single, unified system. For energy asset managers navigating multi-asset strategies, Omnium provides a centralized investment book of record and accounting book of record, enabling seamless tracking and reconciliation across diverse instruments. This flexibility is especially valuable in energy investing, where portfolios often span listed securities, bespoke private deals, and commodity-linked contracts.

Snowflake data share capabilities

Northern Trust’s integrated data share capabilities allow asset managers to ingest, normalize, and analyze data from disparate sources—including alternative data, trading platforms, custodians, and counterparties. This is critical for energy funds, which require real-time visibility into exposures, performance, and operational risks across volatile markets. The platform’s cloud-native architecture supports custom dashboards and data products, helping managers make faster, more informed decisions while maintaining transparency and governance.

Treasury services for cash and collateral management

Northern Trust offers end-to-end treasury and collateral management solutions tailored to the operational needs of complex multi-asset portfolios. This includes margin tracking, collateral management, and liquidity access across bilateral and cleared derivatives, and repo markets. Asset managers benefit from automated workflows, dispute resolution tools, and flexible reporting, all designed to reduce counterparty risk and ensure efficient capital deployment. These services are especially vital in energy investing, where cash flow forecasting and collateral mobility are key to managing long-duration infrastructure deals and commodity trades.

Preparing for the next phase of energy investing

Energy investing is entering a new era—multi-asset, data-driven, and operationally complex. Asset managers need partners who can help them scale with confidence. Northern Trust is positioned to support the next wave of energy innovation and investment.