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Martin Roth Benedicte Gravrand, Opalesque Geneva: Historically, pension funds never allocated much to infrastructure. But as after the 2008-2012 global recession, governments started to disengage from the expensive and lasting financial commitments required by infrastructure projects, this created a gap. Canadian, Californian and Australian pension funds were early entrants in furthering investments in this asset class.
In 2011, the OECD already noted on the growing interest from pension funds in infrastructure investments, thanks to a good match of interests. "Infrastructure investments are attractive to institutional investors … as they can assist with liability driven investments and provide duration hedging. Infrastructure projects are long-term investments that could match the long duration of pension liabilities. In addition infrastructure assets linked to inflation could hedge pension funds’ liability sensitivity to inflation," the think-tank said in a report. Two years later, it estimated that global pension funds had just 0.9% of their portfolios in pure infrastructure plays. Investment in this asset class is building up very ...................... To view our full article Click here
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