Super funds would increase their allocation to infrastructure as they looked for ways to soak up uninvested cash and governments continued their "fetish" for debt-funded assets, AustralianSuper chief executive Ian Silk said yesterday.
"State governments have a fetish for debt-funded public assets. At the same time, super funds have a constant inflow of funds that are looking for investable assets," Silk told the annual Association of Superannuation Funds of Australia lunch in Sydney.
He said when industry funds started investing in infrastructure a decade ago, it was perceived as an alternative investment.
Today, however, it is accepted as mainstream.
To compel super funds to invest in such assets, Silk said governments might need to introduce legislative changes and tax incentives.
He also said super funds would look at more offshore investment opportunities and make more direct investments.
"The challenge for funds in taking more direct investments is whether they have the expertise to do it and whether they can stomach the pain that accompanies such investments," he said.
