OECD: Infrastructure Investing Low Among Largest Pensions


The world’s largest pension funds have significantly increased their allocations to alternative investments over the last four years. But allocations to infrastructure haven’t followed that upward trend, according to an OECD report.

Reported by Pensions & Investments:

Infrastructure investing activity remains low among the largest pension funds and public pension reserve funds worldwide, despite increased allocations to other alternative investments, a report from the Organization for Economic Co-operation and Development showed.


Average allocations to alternatives increased to 19.5% from 17.6% between 2010 and 2013 among the 10 largest pension funds surveyed, while infrastructure allocations were more stable. Of the 71 funds that responded to the OECD survey, unlisted equity and debt infrastructure investments totaled $80 billion, or 1% of total respondent assets, at the end of 2013, up slightly from $72.1 billion, or 0.9% of total respondent assets, at the end of 2012.

Mr. Paula and Raffaele Della Croce, lead manager on the OECD’s long-term investment project and co-author of the report, attributed the slow uptake to unstable regulatory frameworks and a lack of bankable projects.

“Pressure is on the policy side to provide the right conditions for investors to accept infrastructure,” Mr. Della Croce said in a telephone interview.

Although infrastructure investment activity remains low, plan executives are expressing interest in the asset category.

Large pension funds like the €20 billion ($24.5 billion) Etablissement de Retraite Additionnelle de la Fonction Publique, Paris, and $28 billion Afore Banamex, Mexico City, plan to establish new target allocations to infrastructure, according to the report.

Read the full OECD report here.

New York Common Fund Commits $200 Million to Urban Real Estate


The New York Common Retirement Fund has committed $200 million to a fund that invests in real estate in New York City, Los Angeles and other urban areas.

More from IPE Real Estate:

The fund has backed CIM Group’s Fund VIII, which is targeting established US urban areas.

The fund invests in New York City, San Francisco and Los Angeles, focusing on equity, preferred equity and mezzanine transactions between $10m and $250m.

Direct investments, mortgage debt, workouts, public/private partnerships and operating real estate businesses are being targeted.

CIM Group, which was given a $225m commitment for its Fund III by New York Common in 2007, is targeting $2bn for Fund VIII.

New York Common said it made the investment on the back of high returns with prior funds with the manager.

The investor has pegged the current investment at $311m.

CIM has previously distributed $40.1m back to the pension fund.


CIM is co-investing 5% of total commitments to the fund, with a cap of $20m.

The manager will make around 30 to 40 deals.

Limited partners in the fund are projected to achieve a gross 20% IRR, with a 2x equity multiple.

Leverage will not exceed 75%.

The New York Common Retirement Fund manages about $177 billion in assets.


Photo by Tim (Timothy) Pearce via Flickr CC License