Colonial First State’s MySuper lifecycle funds have grown to sufficient scale to hold direct infrastructure assets.
Colonial First State (CFS) has made an allocation to direct infrastructure within its $8 billion FirstChoice Lifestage funds.
Having previously only held listed infrastructure, the CFS lifecycle funds now hold direct infrastructure in Australia, the UK, Portugal and New Zealand.
CFS head of investments Scott Tully said part of the rationale for the direct infrastructure investment was the link between returns in the underlying assets to inflation.
Senior investment manager Jujhar Toki, who made the investment into the assets for CFS, conducted tours in Australia, New Zealand, Portugal and the UK as part of the firm's due diligence process.
"The regulated nature of these infrastructure assets provides some return certainty, with a significant portion of the returns expected to come in the form of a cash yield," Mr Toki said.
CFS currently has a 5 per cent target allocation to direct infrastructure for the younger members in its FirstChoice Lifestage membership.
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