Pension Pool Proposed To Keep US Infrastructure Public

Published: February 24 2008 22:35

The second-biggest US union federation is urging state pension funds to invest some of their $2,000bn assets in domestic infrastructure, in an effort to keep roads and airports out of the hands of private equity and sovereign wealth funds.

In a further sign of mounting US political backlash against such investors, the Service Employees International Union has floated a proposal to form an investment pool with contributions from state retirement systems. The SEIU has 1.5m members and is a power broker in the Democratic party.

The pool would be run by an outside manager and specialise in buying US infrastructure. Many private equity groups and overseas buyers, such as Australian bank Macquarie, have invested in the fast-growing sector.

“It is a question of whether public pension could pool investments they would all own a piece of different infrastructure projects,” Andy Stern, SEIU president, told the Financial Times. “That way you . . . keep it in public hands.”

As the US economy slows, politicians are trying to allay voters’ fears about the impact of foreign investments and globalisation on job creation. Both Democratic and Republican presidential candidates have expressed concerns at the lack of transparency of sovereign wealth funds.

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http://www.ft.com/cms/s/0/0509e700-e325-11dc-803f-0000779fd2ac.html