Pension schemes should think about investing in infrastructure - 6 days ago, 19:00
Amid increasingly difficult economic conditions and volatile markets, pension funds are grappling with diminishing and volatile returns from traditional asset classes — including Treasury bonds and bills, equities, corporate bonds and bank deposits.
These were previously proven sufficient from return and risk management perspectives. But their returns have become less attractive and more positively correlated, resulting in lower returns while losing their diversification elements. Pension funds should look towards alternative investments such as private equity, property and infrastructure.
Most local pension schemes are familiar with private equity and property investments. But infrastructure, too, is an emerging asset class, which portends huge potential benefits for pension funds with regard to return enhancement and portfolio risk mitigation. It also enables them to participate in the country’s infrastructure development agenda.
In recognition of this, the government is advocating pension fund participation in public-private partnerships (PPPs), even designating key projects, including the ...
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