The Infrastructure Fund (TIF), an Australian vehicle backed by a clutch of superannuation funds, has attracted its first overseas investor.
The landmark commitment came from the Military Mutual Aid Association (MMAA), South Korea’s defence ministry fund, which earlier this week pledged $43 million to TIF.
MMAA, which counts 170,000 members, looks after the welfare of the country’s military personnel. With $8.6 billion under management, it provides funding for education, healthcare and disaster relief. It is advised by Seoul-based KB Asset Management, a subsidiary of KB Financial Group with $254 billion under management.
“The investment reflects MMAA’s plans to increase its overseas investments, particularly in quality infrastructure, to generate consistent returns in the medium to long term. MMAA hopes to get more Australian Infrastructure investment opportunities through their investment in TIF,” said Bob Lette, chairman of The Private Capital Group, trustee of TIF.
Established in 1998, TIF has been managed by Melbourne-based Hastings Funds Management since June 2000. It invests in moderate risk assets in the energy, transport and social infrastructure sector. Its portfolio comprises Ballarat Water, ElectraNet, Freeport LNG, New Royal Adelaide Hospital, North Queensland Airports, Perth Airport Group, Queensland Airports Limited, Southwest Generation, State Highway 130 and the Sydney desalination plant.
TIF’s investor base is primarily made of representatives of Australia's superannuation industry such as the A$27 billion (€19 billion; $25 billion) Sunsuper, the A$5.21 billion Catholic Superannuation Fund, the A$4.67 billion Energy Super and the A$3 billion Building Unions Superannuation Scheme.
Last April, TIF teamed up with state-owned China Merchants to win the 99-year Port of Newcastle lease in a A$1.75 billion deal. The fund, which manages A$1.2 billion, has returned nearly 17 percent per annum over the past 10 years.