Future Fund Scoops Up Assets in Infrastructure
Wanting to have a well-diversified portfolio, Australia's Future Fund has scooped up assets in infrastructure amounting to A$2 billion (US$2.08 billion).
The purchase concerns assets of Australian Infrastructure Fund (AIX.AU), which has stakes in airports all over Australia.
Australia's Future Fund has not been the single pension fund snooping up assets in infrastructure. In May 2012, the Construction and Building Union Super as well as AustralianSuper announced it wants to double investments in infrastructure, such as malls, offices and retirement villages, as both said such assets are sure to have potential and its value sure to rise in the coming years.
Created six years ago by the federal government for civil servant pensions, six per cent of the the A$80 billion sovereign wealth fund's portfolio is now invested in infrastructure assets.
"Australian infrastructure assets are an important part of the fund's strategy, given their strong correlation with domestic economic growth, as well as inflation protection and relatively high levels of earnings certainty," the Future Fund's chief investment officer David Neal said in a statement on Monday.
Getting involved in pension savings are compulsory for both Australian workers and employers. In fact, employer contributions to superannuation payments have been marked to rise from the prevailing 9 per cent to 12 percent of wages, effective July 2019.
Apart from the Future Fund, Australia has other 14 superannuation funds. All are included in the top 300 pension funds of 2011, according to the P&I/Towers Watson global 300 research.