What Kinds of Toll Roads Will Pension Funds Invest In?
I reported in Issue No. 44 that pension funds, along with insurance companies, are among the institutional investors that are shifting some of their “alternative” investment funds to infrastructure, including toll roads. Sources at Macquarie tell me that their Macquarie Infrastructure Partners fund, with 47% U.S. investors, includes the Midwest Operating Engineers Pension Fund and Mid-Atlantic Carpenters Pension Fund. Giant CalPERS, the largest public pension fund in the country, allocated an initial $2.5 billion to infrastructure investments late last year. Pension funds can invest in both debt and equity of toll road projects. It is equity investment that they are seeking when they place funds with one or more of the dozens of new infrastructure (equity) investment funds, like those from Macquarie, Goldman Sachs, Carlyle Group, etc. They can also purchase toll road revenue bonds. But here the picture gets interesting. Public employee and union pension funds are tax-exempt entities. S
