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Public Pension Funds Investing in Infrastructure - December 2013

by Stephen Yates

  • 10 Dec 2013
  • INF

Preqin is currently tracking 309 public pension funds that are actively investing in the infrastructure asset class. These investors have a mean assets under management of $20.4bn. Public pension funds have a mean current allocation to infrastructure of 2.89% of total assets, while the mean target allocation for these investors stands at 4.76%. This shows that, on average, public pension funds have capital reserved for infrastructure investments over the coming 12 months.

The majority of public pension funds investing in infrastructure are based in the US, representing 54% of the total. Thirty-six percent of public pension funds are based in Europe, while 6% and 4% are based in Asia and regions outside of North America, Europe and Asia respectively. Public pension funds investing in infrastructure seek opportunities in a range of geographic regions: 57% seek investments in North American funds/assets and a further 50% look for investments in European countries. A significant 49% of public pension funds are looking for infrastructure opportunities on a global scale, 15% will invest specifically within Asia and 16% target investments outside the traditional markets of North America, Europe and Asia.

Notable public pension funds investing in infrastructure include OMERS, which currently has 24% of total assets directly invested in infrastructure assets, equating to around CAD 14bn.  OMERS has been directly investing in infrastructure projects and companies since 1998, predominantly through its infrastructure investment division, Borealis Infrastructure. Other public pension funds investing a significant level of capital in infrastructure funds and assets include Canada-based CPP Investment Board, South Korea-based National Pension Service and Canada-based Ontario Teachers’ Pension Plan. These three investors have a combined $29.4bn currently invested in the infrastructure asset class.

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