Infrastructure investment of pension funds in an international context

- "Infrastructure investments by the private sector have reached a high growth rate in recent decades. Multiple Public-Private Partnerships (PPPs) models have emerged as the key tool to this development."
- "The fact that infrastructure investment projects are of a long term nature, and that there remains a good relationship between profitability/risk observed in many of them, has attracted the attention of pension fund administrators in many countries who have been increasing the weight of this type of investment in their portfolios."
- "However, not all the results have been successful. This type of project is highly complex and requires specialized multidisciplinary teams to study each project after individually, which has made accurate evaluation difficult in some cases. At the same time, there can be numerous limitations in some countries that make pension fund participation difficult. Among other notable problems, there exists the lack of coverage in the face of specific and diverse risks for each project, bureaucratic and regulatory issues."
- "Conversely, in other countries, institutional changes have been made to favour infrastructure private financing, modifying regulation, offering diverse types of warranties and making the processes of awarding of bids more transparent and effective."
- "The private pension funds participation in develop countries has had different kind of funds schemes and cotized and non-cotized companies in the market. However, the basic model is in each one."
- "In this pension watch we will describe the model of private investment in countries outside of Latin America where a greater participation from the private sector has developed in recent years. Specifically, we will review the cases of Australia, the United Kingdom, Canada, the USA and Continental Europe."
BBVA Pension Watch July2010

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