Data in the latest OECD report on pension funds’ long-term investments clearly show evidence the pension fund managers have a strong interest in long-term investment, the organisation said. But the level of such investment is still low and on average stable.
The report surveyed 86 large pension funds and public pension reserve funds in more than 35 countries, managing nearly €7.3 trillion in all – more than one-third of total assets held by this type of investor worldwide.
The report stated: "This year’s survey yet again reveals a low level of investment in infrastructure on average among the surveyed funds, despite evidence of a growing interest by pension fund managers. This seems to confirm the importance of barriers and disincentives that limit such investments and the relevance and need for policymakers to address them."
One barrier to long-term investment is the lack of clear definitions, it said. Although pension funds do have data on their long-term investment – and infrastructure investment in particular – methodologies and definitions used to classify such investments differ, making comparisons difficult, the OECD said.
The absence of objective, high-quality data on infrastructure investments makes it hard for investors to assess investment risks and understand correlations with the returns of other assets, it said. The OECD also underlined the need for pooled infrastructure investment vehicles for smaller institutional investors.
Governments have already taken some steps to tackle some of the problems, the report noted and recent G20 meetings have recognised the urgent need to deepen and broaden capital markets so developing countries can use their own financial resources and attract capital from abroad, the OECD said.
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