Industry Super Australia has called on state and federal governments to proactively partner with superannuation funds to develop infrastructure projects, saying this will boost economic growth as well as member savings.
Industry Super Australia (ISA) has released a research report which shows industry super funds are “effectively leveraging the scale and long term investment horizon to invest in real economy assets which have been the foundation of superior member returns”.
The report says that industry super funds have outperformed retail super funds by 1.7% a year on average over the last 19 years and SMSFs by 0.4% on average over the last seven years.
Pointing to analysis by the Boston Consulting Group, the report says two-thirds of this outperformance related to the investment in unlisted assets, “especially physical assets”, by industry super funds.
ISA Chief Economist, and author of the report, Stephen Anthony, said: “We risk consigning the economy to a low growth trajectory unless we more effectively connect our pool of long term superannuation capital to investment opportunities that will be future drivers of growth like infrastructure and private equity.”
“As a consequence of their longer investment horizons, industry super funds, will invest in improving assets, adding both jobs and economic growth, and delivering steady returns to fund members.”
Industry Super Australia is calling on governments, both state and federal, to work collaboratively with super funds to develop a “pipeline of appropriate, ‘investment-ready’ infrastructure projects”.
“Industry super funds have spent 30 years improving their investment model to the benefit of both members and the broader economy. They are ready, willing, and able to develop the large infrastructure that Australia needs to jump-start growth. We look forward to working with governments of all stripes to identify what their priorities are,” Mr Anthony said.