Pension fund investments in infrastructure

Infrastructure investment is increasingly important for institutional investors. This paper focuses on pension fund allocations to infrastructure, using the CEM Benchmarking database. We document that larger pension funds, public pension funds, and pension funds with a higher allocation to other alternative assets are more likely to invest in infrastructure. Pension funds across the globe face infrastructure investment costs that are comparable, but we observe significant scale advantages in infrastructure investments, with larger pension funds exhibiting lower investment costs, and higher net returns. Importantly, infrastructure has been among the best-performing asset classes, as measured by net returns, and we document persistence in pension fund infrastructure investment performance over a one-year horizon.