Top 25 North America-Based Private Sector Pension Plans Investing in Infrastructure – August 2014

by Brian Chung

  • 27 Aug 2014
  • INF

Preqin’s Infrastructure Online service currently tracks 172 North America-based private sector pension funds investing in the infrastructure asset class. The top 25 North America-based private sector pension funds by allocation to infrastructure have aggregate assets under management of more than $781bn. On average, these top 25 private pension funds have a current allocation to the asset class of 6%, which is below their average target allocation of 8%. As a result, more capital is likely to flow into infrastructure as these private sector pension funds continue to invest in the asset class in order to move towards their target allocations.

Thirteen of the top 25 North America-based private pension funds are located in Canada and 12 are based in the US. Canadian investors continue to be prominent investors in the asset class; the top Canadian private pension investors in infrastructure have an aggregate $3.3bn allocated to the asset class, an average of approximately 5% of assets under management.

With regard to how these investors allocate to infrastructure, 12 of the top 25 private pension plans have established separate infrastructure allocations and four invest through a private equity allocation. The remaining nine investors invest in infrastructure either through part of a real assets allocation, a general allocation to alternative investments, or through another form. Top North America-based private pension funds will consider different routes to market for future investments in infrastructure, although the vast majority, 96%, favour investment via unlisted funds. Twenty-eight percent will consider investing in infrastructure assets directly, and 16% will do so via listed funds.

Colleges of Applied Arts & Technology Pension Plan (CAAT) is one example of a North America-based private pension fund planning to invest in infrastructure in the year ahead. In the next 12 months, the pension fund will allocate between $55mn and $110mn to two or three unlisted infrastructure funds targeting core infrastructure assets globally. Another example is the Montreal-based Société de transport de Montréal (STM), which will commit up to $55mn to a mixture of direct infrastructure projects as well as unlisted infrastructure funds targeting global assets, specifically in Asia.

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