Pension Funds Investment in Infrastructure

A growing infrastructure gap threatens the long-term development of emerging and developed economies. Due to a combination of aging infrastructure, years of under-investment by governments, and expanding populations, it is estimated that $53 trillion in infrastructure investments will be needed through 2030 to support global economic growth.

Unfortunately, strained public finances, weak debt and equity markets, and restrictive commercial bank capital requirements are limiting traditional financing sources for infrastructure projects.

Pension funds, with estimated assets of over $65 trillion in OECD countries at the end of 2009, have the potential to be a much greater source of capital for urgently needed massive investments in infrastructure. But their investments must be supported by transparent and long-term regulatory frameworks. This report is intended to support dialogue around policy changes that can improve the investment environment for institutional investors.

Pension Funds Investment in Infrastructure, a recently released report from the Organisation for Economic Co-operation and Development (OECD) developed with the sponsorship of Oliver Wyman’s Global Risk Center, describes policy changes that can improve the investment environment for institutional investors.