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Defining contributions: Australian superannuation funds have been pioneers in solving some of infrastructure investing
The conventional wisdom tells us that defined contribution retirement plans are ill suited to invest in infrastructure — the sector lacks liquidity, requires too much capital and too much long-term planning. But how then could Australia, a nation with 90 percent of its pension assets in DC plans, have arguably the highest proportion of pension assets allocated to infrastructure worldwide (according to Pension Fund Investment in Infrastructure: A Comparison between Australia and Canada by OECD?
With a steady stream of major deals, such as the past year’s $5.3 billion transaction of Port Kembla and Port Botany in New South Wales, Australian superannuation funds are making it look like DC plans are not only suited to invest in infrastructure, they are dressed to the nines. And, with much of the worl