Bridging Public Pension Funds and Infrastructure Investing

97 Pages Posted: 2 Feb 2019 Last revised: 18 Jul 2019

See all articles by Clive Lipshitz

Clive Lipshitz

Tradewind Interstate Advisors

Ingo Walter

New York University - Leonard N. Stern School of Business; New York University (NYU) - Department of Finance

Date Written: January 20, 2019

Abstract

Underfunding of U.S. public pensions is a chronic policy issue that has become more severe over time. Public pension obligations were estimated at $5.96 trillion at the end of 2017 supported by assets of $4.33 trillion — a shortfall of $1.63 trillion and a ‘funded-ratio’ of 72.6%. We consider the sustainability of public pension systems in the face of changing demographics and frequently inadequate funding and investment returns, and make the connection to the long-term capital needs for infrastructure renewal and development, including the shift of such projects from government to the private sector or to public-private partnerships. We examine how infrastructure finance has performed as an asset class. We assess alternative ways of achieving a more efficient connection between public pension funds and the capital structures of infrastructure projects.

Keywords: Public pensions, pension liabilities, infrastructure, asset allocation, real assets, pension governance, illiquidity premium, investment expenses

JEL Classification: J32, G11, G23, H41, H75, O18, R42, R53

Suggested Citation

Lipshitz, Clive and Walter, Ingo, Bridging Public Pension Funds and Infrastructure Investing (January 20, 2019). Available at SSRN: https://ssrn.com/abstract=3319497 or http://dx.doi.org/10.2139/ssrn.3319497

Clive Lipshitz

Tradewind Interstate Advisors ( email )

2013961709 (Phone)

Ingo Walter (Contact Author)

New York University - Leonard N. Stern School of Business ( email )

44 West 4th Street
New York, NY 10012
United States
212-998-0707 (Phone)
212-995-4220 (Fax)

New York University (NYU) - Department of Finance

Stern School of Business
44 West 4th Street
New York, NY 10012-1126
United States

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