60% of investors have seen social infrastructure deals collapse due to culture and conduct issues, finds S-RM

60% of investors have seen social infrastructure deals collapse due to culture and conduct issues, finds S-RM

• Culture and conduct issues are the leading cause of failed social infrastructure deals, ahead of regulatory instability (51%) and sustainability risks (33%)
• More than two-thirds (67%) of investors say human rights and community risks influence investment decisions in the sector
• Despite growing scrutiny, 71% rate social infrastructure as an attractive investment opportunity over the next five to ten years

London, 27 May 2026 – Six in ten investors (60%) have had a social infrastructure deal fall through in the past three years due to culture or conduct issues at the target company, according to S-RM’s latest Investor Sentiment Report: Forces of Change. This was the highest reported cause of deal failure in the sector, ahead of regulatory instability (51%) and sustainability risks or adverse environmental impact (33%).

The report, which surveyed 150 global investors across infrastructure sub-sectors, found that non-financial risks have become an increasingly important investment consideration. Four in five (80%) investors in social infrastructure (such as hospitals, schools, or social care facilities) said these risks are either “extremely important” or “very important” when making investment decisions.

Regulatory instability was identified as the biggest factor influencing investment decisions in the sector, cited by 71% of respondents. Human rights, modern slavery and community displacement risks followed closely behind at 67%, ahead of sustainability risks (65%), corruption and financial crime exposure (60%), and security or conflict-related risks (60%).

Investors in social infrastructure also identified several specific regulatory and human rights-related factors affecting investment decisions in this sub-sector. Political interference in regulatory decisions was the most significant regulatory concern, cited by 67% of social infrastructure investors, while 52% pointed to human rights risks across supply chains and 42% highlighted reputational risks linked to human rights controversies.

Strong appetite despite rising scrutiny

Despite these challenges, investor appetite for social infrastructure remains strong. On average, more than 70% of investors rate the sector as an attractive investment opportunity over the next five to ten years, behind digital & telecoms infrastructure (79%) and energy & environment infrastructure (75%). Unsurprisingly, investors who focus on social infrastructure viewed their own sub-sector as the most promising (89%), followed by digital & telecoms (80%) and energy & environment (73%).

Ian Massey, Head of Corporate Intelligence, EMEA at S-RM, said:

Social infrastructure investors are operating in a sector where reputational, operational and regulatory risks are increasingly shaping deal outcomes. Unlike other infrastructure sectors, the assets involved – from healthcare and education facilities to housing and community services – are closely tied to public trust and social impact, which means culture and conduct issues can quickly become material investment risks.''

''As scrutiny from regulators, communities and investors continues to grow, firms are placing greater emphasis on governance, compliance, and – in particular – culture during due diligence. Investors that can identify and manage these risks early will be better positioned to protect value and avoid disruption throughout the investment lifecycle.”

Penelope Jenkins, Senior Associate, Corporate Intelligence at S-RM, said:

Social infrastructure has evolved into a highly strategic investment area, driven by ageing populations, growing demand for healthcare and education, and increasing pressure on governments to deliver essential services. This is creating opportunities for private investors and public-private partnerships across assets including healthcare facilities, student accommodation and education providers.''

“At the same time, investors are under greater pressure to demonstrate measurable social impact and maintain high operational standards. Human rights risks, supply chain scrutiny and regulatory compliance are no longer peripheral concerns – they are increasingly central to how investors assess value, performance and long-term sustainability in the sector.”

The full report, 2025 Investor Sentiment Report | Forces of Change: How deal teams can thrive in an age of instability, is available to download here: https://www.s-rminform.com/investor-sentiment-report-2025