The $25 billion stimulus package to encourage investment in infrastructure projects by the private and superannuation investment sectors as announced in the budget will only make investments marginally more attractive for super funds, AustralianSuper said yesterday.
"Each of these [removals of a roadblock] makes infrastructure more attractive at the margin," AustralianSuper chief investment officer and deputy chief executive Mark Delaney said in an interview with InvestorDaily.
Delaney said the measures would do more for retail investors, because they were subject to higher taxation rates than super funds.
Although he said the measures were a good development for the sector, they would not lead to a radical change in AustralianSuper's investment approach to infrastructure projects.
"They are all good things to do and help the infrastructure task," he said.
"[But] the big driver of any investment is the returns and the risk and infrastructure assets are very lumpy and almost always have to be assessed on a case-by-case basis."
AustralianSuper has $4.4 billion invested in infrastructure assets, of which $2.4 billion is tied up in Australian projects.
The asset class returned 7.9 per cent a year for the fund over the five years to March 2011, compared to 4 per cent a year for Australian equities over the same period.
"We are already a very large infrastructure investor and will continue to look for good opportunities," Delaney said.
A number of super funds have taken the view that the outlook for equity returns will be subdued over the coming years, as volatility is likely to remain high. They hope infrastructure investments will fill the gap that equities might leave in their returns.
"I would like that to be the case, because we have a lot of infrastructure," Delaney said.
"But if you look at the long term, infrastructure has already been the best asset class."
The government also announced in the budget that it would add three members to the Infrastructure Australia Council, including AustralianSuper chair Elana Rubin.
Rubin is the second AustralianSuper board member to join the council after Heather Ridout, who joined the council in May 2008.
