IFM welcomes budget announcement
The offering of tax concessions to attract additional superannuation fund investment in the government's $450 Billion worth of Infrastructure projects was considered a positive reform by Industry Funds Management (IFM).
IFM, which manages over $29 billion in assets ($9 billion in infrastructure) for a number of leading Australian and Global Pension Funds, welcomes any steps that encourage further investment by Australian Superannuation Funds in building the nation.
"The Australian Superannuation system has created a large pool of capital that has a very strong interest in funding this country's infrastructure needs. The challenge ahead is for governments to bring more investment opportunities to the market given the capital available, the investor interest and the imperative of the country to enhance our infrastructure."
IFM's own experience shows substantial Australian capital being invested overseas, in part because there have not been sufficient opportunities for investment here.
"The establishment of a deal pipeline will no doubt help bring more opportunities to the table and provide greater certainty for Superannuation Funds to continue to invest in infrastructure. We look forward to reviewing the investment opportunities that will be made available," he added.
With MySuper reform pending, IFM believe that the announcement around infrastructure provides opportune timing for super funds to consider the role of Infrastructure investments in their strategic asset allocation.
"The tax concessions should help encourage further consideration of infrastructure as an integral part of a funds strategic asset allocation given its innate characteristics and ability to provide an attractive long term net return to members," Kyle concluded.