GLOBAL - Social infrastructure has been tipped as the next hot asset class, with the large Dutch pension funds expected to lead the way.
Ortec CEO Guus Boender said: “Pension fund money should be used to nurture economies and encourage growth and development,” adding that simply tying up investments within the financial markets could lead to a bleak future, if the economy is left by the wayside.
He said the recent boom in infrastructure investments by pension funds was a manifestation of this need to invest in the economy.
The next natural step therefore would be to invest in society’s inner workings, like universities.
Dutch giants such as ABP and PGGM have been known to lead the pack when it comes to forays into new investment classes.
Questioned on whether ABP would consider investing in human capital and social infrastructure, a spokesperson said it would not rule any opportunity out.
“ABP is interested in investments that will give long term real return,” he said. “Alternatives are always considered by the fund.”
The only hurdle stopping any pension fund making these types of investments is that no way of calculating a return – real or virtual – has yet been identified. Pension funds and asset managers are equally well placed to be the ones to eventually home in on this return.
Boender said it did not matter who developed the product, as long as it was brought to the market sooner rather than later.
“If people just save money for their pension, without taking care of the economy, there will only be a future full of rich people within a society that doesn’t work,” he said.
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Barnett Waddingham's head of business development Adrian Cooper has left the consultancy to join TPT Retirement Solutions in a newly-created role.