National Treasury on 26 February 2021 announced draft amendments to Regulation 28 of the Pension Funds Act to encourage investment in infrastructure. The review of Regulation 28 is in response to “a number of calls for increased investment in infrastructure given the current low economic growth climate”. Treasury has invited public comment on the amendments until 29 March 2021.
Comparative to other international emerging market peers, infrastructure spending in South Africa is too low relative to what is considered adequate for a developing economy. Increasing attention is being paid to the ability of investing in infrastructure projects – particularly to help with South Africa’s economic recovery in a post-COVID setting.
For South African retirement funds, investing in infrastructure projects presents the opportunity to achieve both long-term suitable returns for members, while at the same time contributing towards much-needed economic and socioeconomic outcomes. However, there can be a broad range of infrastructure investment opportunities across different asset classes available to investors and each opportunity should be assessed on its own merits, relative to the risk profile of the investor.
In partnership with the ASISA Foundation and Prescient, Athleha-edu’s first educational publication of 2021 focuses on investments in infrastructure – often referred to as an alternative asset class – and the investment fundamentals surrounding infrastructure assets.