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Public Pension Plans Investing in Infrastructure

by Elliot Bradbrook

  • 13 Sep 2011
  • INF

Preqin is currently tracking 229 public pension plans that are actively investing in the infrastructure asset class. These investors have median assets under management of $5.7bn. Public pension plans have a mean current allocation to infrastructure of 2.6% of total assets, while the mean target allocation for these investors sits at 4.2%. This shows that, on average, public pension fund investors have capital reserved for infrastructure investments over the coming 12 months.

The majority of public pension plans investing in infrastructure are based in the US, representing 56% of the total.  37% of public pension scheme investors are based in Europe, while 7% are based in Asia and Rest of World.  These investors seek opportunities in a range of geographic regions: 50% seek investments in North American funds/assets and 45% look for investments in European countries. A significant 38% of public pension plans are looking for infrastructure opportunities on a global scale and 10% are targeting the diversified emerging markets.  11% will invest specifically within Asia and 7% target South American opportunities.

Notable public pension plans investing in infrastructure include OMERS, which currently has around 29% of total assets invested directly in infrastructure assets, equating to around C$15.4bn.  The pension plan has been investing directly in infrastructure projects and companies since 1998 predominantly through Borealis Infrastructure, its infrastructure investment division.  Other public pension plans investing a significant level of capital in infrastructure funds and assets include Denmark-based ATP Lifelong Pension, Brazil-based FUNCEF and South Korea-based Korean Teachers' Credit Union.  The three investors have a combined $11.3bn currently invested in the infrastructure asset class.

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