Register  
 
 
 
 
 
Infrastructure debt 'not that scary': AusSuper chair
Thursday, 8 August 2013 12:20pm

AustralianSuper chair Heather Ridout has urged state governments not to be afraid of going into debt if the money is used to fund infrastructure projects.

Speaking at the Australian Centre for Financial Studies' 'Funding Australia's Future' forum in Sydney, Ridout said that state governments are well-placed to begin infrastructure projects, which can later be privatised with institutional investment from industry super funds.

"If it means state governments have to run a different balance sheet, run a bit of debt on a revolving basis, it's not that frightening, it's not really that scary, and I think we do really need to open our minds to it."

Ridout pointed to the New South Wales Government's model of 'recycling' infrastructure (i.e. selling off existing operations) in order to fund new projects as an example to other state governments.

Ridout's comments are part of a wider push from the industry super sector to encourage governments to put more resources into infrastructure. Governments have a vital role to play, the argument goes, as they are best positioned to bare the risks associated with new projects.

"It's not the business of AustralianSuper to get into taking on construction risk, and that's why the Port Botany one was a very good one," Ridout said. The tender for Port Botany was won by Industry Funds Management (IFM), a consortium of industry funds including AustralianSuper.

The Industry Super Network (ISN) has said industry funds have $15 billion ready to invest over the next five years. Other super investors, however, are not so ready to invest in infrastructure.

Also speaking at the Funding Australia's Future forum, former MLC head Steve Tucker said, "The constraints around liquidity are one serious issue, particularly for the retail sector. You've got members coming and going all the time, you've got people having pensions paid out at the flick of a switch these days."

However, he said that while self-managed super funds (SMSFs) do not currently invest much in infrastructure, this is due to a lack of opportunity rather than a lack of will.

"So you will see technology innovation coming really fast - as you already are - whereby the markets will be created that allow the execution at the desktop for the self-managed investor to get into these types of assets," Tucker said.

Ridout agreed. "Self-managed super funds are the biggest sector and they don't invest much in infrastructure because they can't invest easily enough.

"So rather than invest in infrastructure, they have to invest in the company, so it's very hard for them to get into the deal. So we have a real structural issue here in the super industry around them. And that's a product opportunity which I suspect a few people are having a very good lack at."

News Search   
VideoBrought to you by
Developing investment opportunities
Given the evolution of Australian Equities funds over the last 10 years, how has the Growth team's investment strategy remained relevant? Watch video
MAX
We invite you to the 2014 Marketing, Advertising and Sales Excellence (MAX) Forum and Awards, the premiere event for financial services professionals who are raising the standards in marketing, sales and ... Watch video
Betashares high interest cash ETF
The Betashares high interest cash ETF is currently returning significantly above the default cash rates offered on the larger wrap platforms. Learn more about this product in this exclusive video featured ... Watch video
How to distribute 8% per year from global equities
Investor needs have not changed, what has changed is the level of income available from traditional yield sectors such as cash and bonds. This presentation will cover in detail how investors can diversify ... Watch video
Get it
Daily
FREE to your inbox, get the Financial Standard Daily Email.
Get the Free
iPad app
Download the Financial Standard iPad app for FREE
Industry
Events
APR
19
MAY
28
Asset Allocation 2014 Forum in Sydney,
29
2014 Annual Stockbrokers Conference
JUN
18
MAX: the Marketing, Advertising and Sales Exellence Forum and Awards
APR
28
FPA TASA road shows
29
FPA TASA road shows
News
Bites

$245 (inc GST) for 1 year
 
 
About Us
Contact Us
Privacy Policy
Terms & Conditions
Comments Policy
Events Calendar

Register
Archive
CPD Login
Register

Managed Funds
- Australian
- Global
Superannuation Funds
- Specialist
- Diversified
"Guide To" Series
Product Launches
Showcases

Home
Shows
Learning
Events
Profiles
Showcase
Platform Report
Mandate Chaser
Roundup
Advantage
Benchmarking

FS Advice
FS Super
FS Private Wealth
Copyright © 1992-2014 Rainmaker Group
All material on this site is subject to copyright. All rights reserved. No part of this material may be reproduced, translated, transmitted, framed or stored in a retrieval system for public or private use without the written permission of the publisher.
Link to something 1KoUbBd9