A co-investment in a US toll road will become an industry superannuation fund's second largest infrastructure exposure after Port Botany and Port Kembla in New South Wales.
Cbus has announced an investment of $140 million in the Indiana Toll Road (ITR) that was purchased by IFM Investors in 2015. IFM Investors has 30 Australian super funds as shareholders and a Cbus statement said its investment is alongside IFM Investors Global Infrastructure Fund.
As part of plans to further its co-investment strategy, Cbus is also hiring a specialist infrastructure manager. It will mark another key addition to Cbus' growing investment team, following the appointment of ESG investment manager Nicole Bradford in November.
Cbus executive manager investment strategy Kristian Fok said there is great potential for infrastructure co-investments such as the ITR as the $32 billion fund increases in size.
"Infrastructure is one of the few unlisted asset classes that has the capacity to scale well with the fund's asset growth. To support the fund's activities in co-investments, we are expanding our internal resources including hiring a specialist infrastructure manager," Fok said.
A Cbus statement said infrastructure co-investments provide an opportunity to lower fees and increase influence over the composition of the fund's portfolio.
"Co-investments provide flexibility to add more capital and strategically re-weight asset exposures alongside pooled fund exposures in order to optimise portfolio composition," the statement said.
Cbus investment manager private markets Grant Harrison said the ITR co-investment balances the fund's exposure to domestic and international infrastructure assets "and increases our exposure to toll roads. The addition of this asset also enhances portfolio diversification and is expected to be a stable, long term investment."
"Toll road assets like the ITR match the long term investment horizon for Cbus and other superannuation funds as they generate steady income streams over many years that increase in line with inflation," the Cbus statement said.
Motoring and transport infrastructure has been an area of focus this week with reports that MTAA Super's 2015 return of 9.5% for its MyAuto Super fund was largely put down to a sale of Moto Hospitality, a chain of service stations in the United Kingdom.
Meanwhile Canadian pension funds have flagged their interest in Australian infrastructure.
Get stories like this delivered to your email - Sign up for the free newsletter
Read more about...
, New South Wales
, Port Botany
, Port Kembla
, Grant Harrison
, IFM Investors Global Infrastructure Fund
, Indiana Toll Road
, Kristian Fok
, Moto Hospitality
, MTAA Super
, MyAuto Super
, Nicole Bradford
, United Kingdom