Too much money is chasing too few infrastructure deals in Australia, according to AustralianSuper chief investment officer Mark Delaney.
Speaking yesterday at the Association of Superannuation Funds of Australia annual conference on the Gold Coast, Delaney said AustralianSuper had been forced to invest in infrastructure assets overseas because of the crowded nature of the domestic market.
"There is not the supply of deals to match the supply of capital," he said.
"Infrastructure is now a global business. It's no longer about just Australian funds investing in Australian infrastructure."
He said AustralianSuper, which has a 13 per cent total allocation to infrastructure, had shifted over half of that exposure into overseas assets in the past four years.
The industry fund has investments in Western and Eastern Europe, the United Kingdom and South America.
Many of those investments were made through Industry Funds Management, Delaney said.
Not everyone, however, agreed Australia's market was saturated.
Fergus Neilson, the chief executive of investment firm Babcock and Brown's direct investment fund, said opportunities for infrastructure investments abounded.
"In Australia the pipeline of infrastructure funding requirements is exceeding the deal completions," Neilson said.
"There are major infrastructure bottlenecks that need rectification throughout the world."
Neilson used the United States as an example and said the country needed US$1.6 trillion of infrastructure funding over the next five years.
"There are real opportunities to invest your money fully," he said.
He also forecast that Australian industry funds' exposure to infrastructure assets would grow from an average of 12 per cent of their total portfolio to 20 per cent.
