Industry super funds will invest $19.5 billion over the coming three years in construction and infrastructure projects; in a move that Industry Super Australia (ISA) chair Greg Combet says will help rebuild the Australian economy.
The multi-billion capital expenditure was identified by a survey of industry super funds, IFM Investors and the Industry Super Property Trust.
Since the beginning of the COVID-19 crisis, industry super funds have poured millions into Aussie businesses, helping them rebuild and expand at a time when they need it most, Combet said.
"We're already big investors, but we've got much more planned that will not only grow our members' balances but generate jobs and economic activity across Australia," he said.
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The investment pipeline will create more than 200,000 jobs, with projects in commercial construction, redevelopments, public infrastructure upgrades and developments to make assets more energy efficient.
Infrastructure investments, despite their illiquidity, are "critical to the good performance of the funds", the ISA said, and can achieve strong returns for investors.
"Analysis shows that $100 invested in unlisted assets 15 years ago is now worth $510, in comparison $100 invested in international shares would be worth $351 now," it said.
The survey also found that industry super funds were investing across multiple sectors, including aged care, affordable housing, and direct lending to business and agriculture.
The survey has also revealed the funds are venturing into new investment opportunities across many sectors - ploughing billions into aged care, affordable housing, direct lending to business and agriculture.
The ISA noted that super funds provided a significant portion of the $120 billion in capital raised by local businesses at the end of the Global Financial Crisis.
"Industry super funds hold a major stake in Australia's economic life," it said.
"They invest in Australian listed companies - holding 10% of the ASX - are active in debt markets, have significant infrastructure and property holdings and invest in the wider Australian financial system."
To deliver returns for members, the super system needs a strong economy, just as much as the economy needs a strong super system to support its recovery, the ISA said.
"Government will need to mobilise private investment to create jobs and stimulate the economy - the super system will be vital for this task and industry funds will play a significant role," Combet said.
"Crucial to the industry funds contribution to economic recovery will be policy stability in the super system."