The partnership between Industry Funds Management (IFM) and the Asset Management Council will focus predominantly on the development of new global standards for the management of physical assets, including infrastructure assets.

The International Standards Organisation (ISO) will introduce a series of standards in 2014 for the optimal management of physical assets.

These standards are based on an existing framework created by the UK Institute of Asset Management and the British Standards Institution, named PAS 55, which was developed out of existing engineering practices.

"It is an important risk management option," IFM investment director Danny Elia said.

"With many of these assets, the biggest cost is maintenance. If you are focused on short-term returns, the levers that you pull may not necessarily be aligned with long-term value.

"An asset manager might defer maintenance cost to shore up balance sheet. Thereby, you may put the infrastructure asset at risk; by under-maintaining it."

The Asset Management Council is one of eight entities working together in a global forum to formulate the new ISO standard and Elia will help develop the new standards in a way that will be practical from a transactional viewpoint.

"PAS 55 hasn't been fully embraced because it is a highly technical standard. The ISO 55000 standard is aimed to get a much wider adoption," he said.

"I have a financial background and I'm able to say: 'Let's write it in a way that business and government people understand it.'

"It is very important, because asset consultants are increasingly taking an interest in these assets."

Last week, IFM announced it had entered into a partnership that would see the company contribute skills and financial resources over a period of five years.

Elia will also join the board of the Asset Management Council.