Colonial First State's lifestage funds have reached sufficient scale to invest in direct infrastructure assets for the first time.
MySuper FirstChoice Lifestage superannuation products, which hold more than $8 billion in assets and traditionally invested in listed securities, will look to further match the long-term time horizons of accumulation members by investing in direct infrastructure.
It is targeting a 5% allocation to direct infrastructure for younger members.
Colonial First State Global Asset Management, which oversees the assets, has made initial allocations to investments located in Australia, the UK, Portugal and New Zealand.
CFS head of investments Scott Tully said FirstChoice Lifestage has the advantage of being designed for accumulation members with portfolios designed for different age cohorts.
"The allocation to direct infrastructure is in the portfolios designed for younger members. These members have a long investment time horizon - that is, at least 20 years until retirement - and they are well placed to make long-term investments in long-term assets with less liquidity."
Senior investment manager Jujhar Toki said the regulated nature of infrastructure assets provides some return certainty with a significant portion of the returns expected to come in the form of a cash yield.
CFS's annuities business recently reached $1 billion in funds under administration. Acting general manager of product Sam Wall said reaching this milestone in a short amount of time is testament to CFS's commitment in providing a range of retirement solutions, and the strength of partnerships with CommInsure and Challenger.
"Offering choice helps to mitigate provider risk and gives customers more confidence when using longevity strategies. Ensuring we have a full range of products to cater for all customers is just one of the ways we support advisers," Wall said.