Australia's US$1.6 trillion pool of funds under management is the sixth largest in the world and the largest in Asia.14 Australian superannuation funds (pension funds) have been active investors in infrastructure for almost 20 years and have developed strong expertise and knowledge of the sector. Many of these funds are attracted to the long-term and stable cash flows inherent in infrastructure assets through their inelastic-demand properties.
The Industry Super Network, an industry association representing Australian superannuation funds with around A$150 billion in assets, has recorded 12 per cent annual returns over the past 18 years from its unlisted infrastructure investments - higher than most other asset classes.15
Many superannuation funds with long-term investment horizons now classify and measure infrastructure as a separate asset class, appreciating the unique qualities and diversification it provides in the asset-allocation decision.