OECD Working Papers on Finance, Insurance and Private Pensions

Selected studies on finance, insurance and private pensions policy prepared for dissemination in order to stimulate wider discussion and further analysis and obtain feedback from interested audiences. The studies provide timely analysis and background on industry developments, structural issues, and public policy in the financial sector. Topics include risk management, governance, investments, benefit protection, and financial education. Previous papers addressing these policy issues are available via http://dx.doi.org/10.1787/19936397.


Trends in Large Pension Fund Investment in Infrastructure

Favourable conditions such as the growth of pension fund assets, privatisation trends and changing regulations have increased the interest of institutional investors in infrastructure investment. However, data on pension fund investment in infrastructure is limited. National statistical agencies do not currently collect separate data on these investments, and the different modes available to investors to gain exposure to infrastructure means that information is buried under different headings.

This paper is based on a recent survey of some of the largest pension funds across different regions, accounting for over USD 7 trillion of assets under management. We look at how much these investors have allocated to infrastructure, what is considered as infrastructure, where it fits in the total portfolio allocation, what approaches and forms of investment have been taken, what are recent trends in relation to infrastructure and asset allocation, regulation and green investment. A better understanding of these issues is necessary from a policy perspective in order to be able to attract institutional investors to the infrastructure sector.


Keywords: pensions, returns, barriers, listed securities, alternative assets, regulatory constraints, private finance, infrastructure, diversification, asset allocation, risk
JEL: G28: Financial Economics / Financial Institutions and Services / Financial Institutions and Services: Government Policy and Regulation; G15: Financial Economics / General Financial Markets / International Financial Markets; G23: Financial Economics / Financial Institutions and Services / Non-bank Financial Institutions; Financial Instruments; Institutional Investors; G18: Financial Economics / General Financial Markets / General Financial Markets: Government Policy and Regulation; J26: Labor and Demographic Economics / Demand and Supply of Labor / Retirement; Retirement Policies
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