Infrastructure investment needs to open up, says SMSF Association
This week, the SMSF Association made a statement about opening up infrastructure investment to SMSF investors.
According to Andrea Slattery, CEO and Managing Director, SMSF Association: “With both the Government and Opposition focusing on infrastructure – including how to raise the billions of dollars in capital required to meet Australia's needs in the coming decades -- now is the opportune time to remove any road blocks to SMSF investment in this asset class.”
Michael Cummings, Head of Australian and NZ Funds - Infrastructure, AMP Capital responds: “For SMSF investors, particularly those in or nearing retirement, an investment in direct infrastructure offers both a degree of security and potentially higher yields than what they can currently get from cash or terms deposits.”
Until recently, direct infrastructure investment was only available to large institutional investors due to the significant amount of capital needed to make an investment.
Cummings asserts: “Our priority now is to make investing in infrastructure easier than ever. In the coming months, this will see us continue to align our global infrastructure offering and expertise in asset management and sector origination with the growing market of SMSF trustees wanting to capitalise on direct infrastructure investment opportunities across the key sectors of energy/utilities, transport and airports.”
What’s the appeal?
Investment returns from infrastructure generally have a low correlation to other mainstream assets such as equities and bonds and. While Greenfield projects come with a higher risk, established (Brownfield) infrastructure has a risk profile that typically sits between cash and fixed income and property and equities.
With interest rates likely to remain low over the next few years, the demand for infrastructure is expected to be strong as SMSF investors look for defensive securities that can offer an attractive stable yield, inflation protection as well as the potential for capital growth.
About infrastructure at AMP Capital
Infrastructure offers investors the opportunity to own the utilities and facilities that provide essential services and help drive economic growth. There are a number of ways investors can access the benefits of infrastructure investment, including via managed funds such as the Core Infrastructure Fund and Global Infrastructure Securities Fund.
Find out more about AMP Capital’s capabilities in infrastructure here.