SPAA calls for easier SMSF infrastructure investment
The high dollar threshold for infrastructure investment — and the long-term "sticky" nature of the required investment — makes it difficult for self-managed superannuation funds (SMSFs) to become involved in the sector, according to the SMSF Professionals' Association of Australia (SPAA).
However the organisation has used a submission to the Productivity Commission public infrastructure inquiry to state that the ability to more easily invest in infrastructure would assist SMSFs to move beyond their current focus on cash and term deposits.
It suggested this might be achieved by way of unitising investment in infrastructure projects.
"Currently SMSFs are extremely limited in investing directly in infrastructure due to the high dollar threshold for infrastructure investment and the long-term "sticky" nature of the required investment," the submission said. "SPAA believes that addressing these issues will provide the most significant challenges in allowing SMSFs to have better opportunities to invest in infrastructure projects."
It said that unitising investment in infrastructure projects to smaller investments for SMSFs (eg, $25,000 units) would be one way to overcome current limitations. The submission said SMSFs had been criticised for an "overweighting" towards cash and term deposit investments, but SPAA did not agree with this criticism, claiming that SMSFs had outperformed ARPA-regulated funds between 2008 and 2012.
"We believe that infrastructure investment will allow for a more productive and efficient use of SMSF capital," the SPAA submission said. "Allowing SMSF capital to finance infrastructure investments would allow SMSF capital to have a more productive and efficient influence on the real economy than cash or term deposits."
Recommended for you
Despite ASIC concerns about private credit funds being accessed via the advised channel, there are questions regarding how high its usage actually is among financial advisers.
Challenger has looked to the superannuation industry for its appointment of a group chief investment officer, a newly-created role.
Perpetual has confirmed it has entered into an exclusivity agreement with a US private equity firm to progress discussions regarding the sale of its wealth management division.
Paradice Investment Management has become the latest fund manager to launch an active ETF version of its managed fund, placing greater emphasis on retail distribution.
