CalPERS and Asian investors back global infrastructure funds
CalPERS and Asian institutional investors are raising their investment in global infrastructure, respectively backing platforms managed by UBS and Aberdeen.
California Public Employees’ Retirement System has committed $485m (€362m) to a global infrastructure partnership with UBS Global Asset Management. UBS will contribute $15m and act as managing member of the joint venture, known as Golden State Matterhorn.
CalPERS, which currently holds $1.8bn in infrastructure assets, said its was targeting stable, risk-adjusted returns in public and private infrastructure. The fund, with a total of $30bn in its real assets portfolio, said transportation, power, energy and water sectors in the US and global developed markets were its main focus.
Infrastructure investments returned 22.8% during the pension plan’s 2013-14 fiscal year and 23.3% over the past five years.
Aberdeen Asset Management, meanwhile, has launched and seeded its fifth infrastructure fund, the Aberdeen Global Infrastructure Partners II fund. Commitments came from a range of Asian institutional investors.
Overall investor commitments to infrastructure across Aberdeen’s platform now stand at $2.3bn.
Andrew McCaffery, global head of alternatives at Aberdeen, said interest in the fund provided an insight into “increasing demand from institutional investors attracted by the potential for stable income over a sustained period”.
“It is also a reflection of the growing allocation to alternative investments and strategies – from an ever-increasing number of investors,” McCaffery said.
The new fund will invest in all major sectors of social and economic infrastructure including health, education, social housing, government accommodation, roads, bridges, rail, rolling stock and waste management.
Aberdeen said it had a bias towards greenfield infrastructure and was focused on locations with political stability and visibility on government infrastructure procurement policy.
Outside Europe, the potential for investment in infrastructure was “very promising”, it added, pointing to Australia’s active PPP (Public Private Partnership) market.
In North America, Aberdeen said complexities of a state-by-state procurement regime meant more pro-active approach to securing mandates was required.