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Infrastructure Investment Option

Hostplus' infrastructure investments are selected to build a well-diversified global portfolio of managers and assets, which offers a strong mix of cash yield and capital growth.

Additionally, Hostplus uses its scale and expertise to identify and secure scarce and high-value assets, which it can co-invest directly in. This helps to reduce costs and allows additional exposure to high-quality assets that will continue to drive returns over the long-term.

The Infrastructure portfolio - and infrastructure investments more generally - typically exhibit the following characteristics, which combine to make them attractive for long-term, patient capital investors:

  • Capital intensive and typified by stable, predictable income flows over a long time frame
  • Provide a level of inflation protection with revenue directly or indirectly linked to inflation and economic growth
  • Typically long-term projects (e.g. 50+ years in some instances)
  • Provide essential services to the community
  • Monopolistic characteristics with high barriers to entry

Strategic Asset Allocation

Infrastructure

Target return

Accumulation:
CPI plus 3.0% p.a. on average over 20 years
Pension:
CPI plus 3.5% p.a. on average over 20 years

Investment risk1

High (Negative returns expected in between 4 to less than 6 out of every 20 years)

Investment style

Long-term direct investment option that invests in tangible infrastructure assets, such as airports, seaports, toll roads, renewable energy and utilities, both within Australia and globally.

Investment objective

This option consists of tangible infrastructure assets and aims to achieve income returns and capital growth over the longer term.
This option may suit Accumulation investors who have a five year plus investment time horizon.
This option may suit Pension investors who have a four year plus investment time horizon.

Minimum suggested investment time frame2

Accumulation:
5 + years
Pension:
4 + years

Asset allocation guidelines

Asset Class

Range

Strategic Asset Allocation Benchmark

Infrastructure

0 – 100%

100%

55%: Growth Assets
45%: Defensive Assets

1. The level of investment risk is based on an industry-wide Standard Risk Measure. It shows the number of expected negative annual returns over a 20-year period.
2. The Minimum Suggested Investment Time Frame is based on the risk and return profile of this option. The time frame considers volatility and the likelihood of negative annual returns in any one year.


Investment Managers as at March 2019:

  • Campus Living Funds Management Limited
  • Colonial First State Property Limited
  • Capella Management Services Pty Ltd
  • First State Investments (UK) Limited
  • IFM Investors Pty Ltd
  • Industry Funds Management Pty Ltd
  • First State Investments (UK) Limited
  • QIC Investments Pty Ltd
  • H.R.L Morrison & Co Limited

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