In recent years, infrastructure has emerged as an attractive asset class for Canadian pension plans and endowment funds looking for long-term, stable investments with strong risk-adjusted return characteristics. Large pension plans have developed into global leaders in infrastructure investing, as they have built teams of experienced investment professionals and committed billions to the asset class. However, infrastructure investing is also a good fit for most any size of pension plan.
Northleaf Capital Partners’ infrastructure investment program is doing well, says the firm. The program, which launched in mid-2011 and is focused on direct investments in OECD markets, has reached approximately $500 million in capital commitments.
And other pension news in brief.
More emphasis to go on private placements in infrastructure and real estate
Pension giant teams up with Japanese pension funds to raise $20 billion.
Part 2 of our coverage of the Investment Innovation Conference.
Ultra-low yields in a potentially volatile global and domestic macroeconomic environment create a number of challenges for global pension plan sponsors—and 2012 will indeed be the year of difficult decisions.
Infrastructure is one long-term asset class that is well-suited to meeting the long-term liabilities of pension funds. However, it has traditionally been available to the largest pension funds only, those with the capital and contacts to access the best deals.
David Rogers, partner and founder of Caledon Capital Management, says pension plans of all sizes are looking for ways to reduce the risk from continued volatility in the public markets. For those looking to diversify and replace the returns they were once able to count on from equities, alternatives make sense.
When institutional asset managers want to smooth out volatility, one of the asset classes they turn to is global infrastructure.