Is Pension Capital the Missing Piece in U.S. Infrastructure Investing?

By: IFM Investors

There is a generational opportunity for U.S. governments to partner with investors of Australian pension capital to build the infrastructure that Americans will rely on into the future.

Hundreds of millions of U.S. citizens and businesses rely on roads, ports, airports, water systems, and digital and energy networks to meet the needs of daily life. Infrastructure is the backbone of the U.S. economy and plays a critical role in supporting U.S. competitiveness.

Despite this, much of the U.S.’ infrastructure is in a poor state of repair or is no longer fit-for-purpose. The country faces an infrastructure funding gap of $3.7 trillion through 2033.¹

Australia’s retirement savings system, known as superannuation or “super”, is one of the fastest growing anywhere in the world, with $3.0 trillion in funds under management and nearly $3.0 billion flowing into the system every week.² In the next five years, it is projected to become the world’s second largest pool of retirement savings, second only to the U.S., and reach $5.4 trillion by 2035.³

Most of these savings are professionally managed and invested across public and private markets. As the system has grown and matured, Australian pension funds have been increasingly investing in international markets to help diversify their portfolios, manage risks, and deliver healthy long-term returns for their members. Large institutional pension funds are now investing nearly half their assets in international markets, and the U.S. is the top destination for this investment.⁴

Based on current trends, total investment by Australian pension capital into the U.S. is set to triple from around $500 billion to $1.5 trillion by 2035⁵ – creating attractive funding prospects to help America meet its growing infrastructure needs.

Revitalizing U.S. infrastructure: The pension capital advantage is a policy blueprint by IFM Investors, a global asset manager founded and owned by profit-to-member pension funds.

We believe pension capital investors – with their focus on investing to protect and grow the retirement savings of working people – could help bridge the U.S.’ funding gap and enhance the resilience and productivity of U.S. infrastructure assets. As pioneers of the asset class, these investors have deep expertise in infrastructure.

Australian pension funds have already invested $29 billion in infrastructure across the U.S., with total infrastructure equity investment projected to reach almost $67 billion by 2035.⁵ IFM Investors also invests in U.S. infrastructure on behalf of more than 200 U.S. pension fund clients, collectively managing the retirement savings of more than 20 million American workers and retirees.

There is a generational opportunity for U.S. state and local governments to partner with investors of Australian and American pension capital – including through shared ownership and governance arrangements – to build the infrastructure that Americans will rely on into the future. Through public-private partnership (P3) and asset recycling models, state and local governments can potentially free up public resources to invest in new infrastructure priorities.

In our policy blueprint, we set out four reform recommendations that we believe can help address the U.S.’ infrastructure funding gap by expanding the pipeline of investable projects and mobilizing the investment of long-term and trusted pension capital.

1. Governments should partner with pension capital investors to pursue asset recycling, leasing existing brownfield assets, such as roads, airports and utilities, to long-term investors and reinvesting the proceeds into new infrastructure.
2. The report proposes a pilot Infrastructure Investment Incentive Grants (I3Gs) program, providing time-limited federal incentives to states and municipalities that successfully recycle assets and reinvest the proceeds.
3. Regulatory reform could allow existing tax-exempt municipal debt to remain in place when assets enter P3 arrangements, reducing transaction costs and making projects more viable.
4. Targeted legislative change could allow new tax-exempt debt to be used to acquire P3 concessions, further lowering financing costs and unlocking additional capital.

Click here for further detail on these recommendations in Revitalizing U.S. infrastructure: The pension capital advantage on the IFM Investors website.

IFM Investors is a global asset manager, founded and owned by pension funds. We are one of the world’s largest infrastructure managers, regularly working with governments as a partner in critical infrastructure build, renewal, and management.

Our purpose is to invest, protect, and grow the long-term retirement savings of working people. With assets under management of approximately U.S. $184.1 billion (A$262.7 billion), as at 31 January 2026, we serve over 800 institutional investors globally, including more than 200 U.S. pension funds. Collectively, our investors manage the retirement savings of more than 160 million working people worldwide.

IFM operates from 17 offices across the world, including offices in New York City and Houston.

Endnotes:

1. American Society of Civil Engineers (2025) Report Card for America’s Infrastructure.
2. APRA (2026) Quarterly superannuation performance statistics highlights - December 2025.
3. IFM Investors, Super Members Council, & Mandala (2025) Bridging the Gap: the opportunity for Australian pension capital in the UK and Europe
4. IFM Investors, Super Members Council, & Mandala (2025) Bridging the Gap: the opportunity for Australian pension capital in the UK and Europe
5. Super Members Council (2025) Data, modeling and projections

Disclosures: This material is provided for informational purposes only. It does not constitute an offer, invitation, solicitation, or recommendation in relation to the subscription, purchase, or sale of securities in any jurisdiction and neither this material nor anything in it will form the basis of any contract or commitment. This material is confidential and should not be distributed or provided to any other person without the written consent of IFM Investors.

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