Encouraging Pension Fund Investment into Infrastructure Development

Governments and project sponsors need to recognise the major barriers to investment Michael Tichareva Pension Funds are a major source of capital in the investment markets, especially the listed investment sector in many countries. A study conducted by the Organisation for Economic Development and Cooperation (‘’OECD’’) in 2011 revealed that Pension Funds, although major providers of capital, were not major players in real estate and private equity, and most certainly in infrastructure. Our own experience confirms this as the situation has not changed over the last decade. In most African countries, Pension Funds hold large amounts for investment. However, the allocation towards infrastructure is generally disappointing, accounting for less than 5% of Pension Fund assets in developed Pension Fund jurisdictions such as South Africa, although Regulation 28 of the Pension Fund Act is currently under review. (adsbygoogle = window.adsbygoogle || ).push({}); The reasons for limited investment in infrastructure are the many barriers that exist in this asset class that is generally not known.

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