How investing in infrastructure adds to your super returns

Arguments about the need to invest more in Australia’s ageing infrastructure are common these days, with the big pot of money held by super funds often seen as the solution.

But the reality is super funds are already big investors in infrastructure assets and if you’re a member of a big super fund, chances are you are a part-owner in an airport, a pipeline, or a major shipping port.

So why have super funds embraced infrastructure and what’s in it for you as a super fund member?

What is an infrastructure asset?

Around the world, large superannuation and pension funds have been major investors in infrastructure since the 1990s. This coincides with the trend by governments to sell off their key assets to balance their budgets.

One of the big attractions of infrastructure investments is that they are tangible assets and represent many of the public utilities we need for everyday essential services, including:

• Regulated utilities: Electricity and gas supplies and water distribution systems.
• Transport: Roads, bridges, airports, seaports and railways.
• Social: Hospitals and aged care, courts, prisons and schools.
• Communication assets: Radio and TV broadcast towers, cable systems and satellite networks.

Examples of the infrastructure assets currently owned by large super funds include many of our airports, the major motorways in our capital cities, the key port facilities in Sydney and Brisbane, oil pipelines in the US, shopping centres in the UK and several European electricity and gas networks.

Who’s investing in infrastructure?

Over the past decade, industry super funds in particular have made a point of investing in Australian infrastructure. As the super sector has grown, so has the value of the infrastructure assets held within it.