Why Australia’s super funds continue to engage with Washington

Published in partnership with IFM Investors

The US is one of the most dynamic and innovative economies on earth.

But in recent years, its infrastructure crisis has collided with something potentially more challenging than crumbling roads and outdated airports: periods of uncertainty that can reverse course on investment policy without notice.

It was a contradiction Australian super funds grappled with during meetings across Washington, New York and Silicon Valley in March.  

However, David Whiteley, head of global external relations at IFM Investors, a global infrastructure investor owned by pension funds and focused on long‑term value creation, said it holds infrastructure assets for decades.

“We look through political cycles,” says Whiteley, who was part of the sizeable Australian delegation that attended the second Australian Superannuation Investment Summit in the US.

“We’ve engaged with US administrations over more than a decade across both Democratic and Republican Administrations. The challenges and opportunities in infrastructure policy have been constant. This is common across many OECD nations and not isolated to the US.”

Australian super funds currently have around $344 billion (A$500 billion) invested across US assets, of which approximately $19.9 billion (A$29 billion) is allocated to US infrastructure. Exposure to the sector has to date been limited, reflecting regulatory complexity and differing public‑policy approaches to asset ownership across US states and at the federal level.

But interest in expanding these allocations has grown in line with Australia’s booming pension pool, which has now reached $3 trillion (A$4.5 trillion).

The Australian Superannuation Investment Summit is aimed at paving the way for more investment despite ongoing uncertainty.

“The fundamentals are that the US is the world’s largest economy,” Whiteley says.

Delegates at the Summit also met with senior AI executives and experienced the country’s innovation culture first-hand, against the backdrop of a fluid tax, tariff and ESG policy environment.

“While other markets may be growing more quickly, the US remains highly dynamic. Super funds will continue to have exposure – potentially one in five US dollars invested there – because of its scale and growth.”

An untapped investment opportunity meets a government necessity 

US infrastructure investment as a share of GDP sits at approximately 1.6 per cent – lower than other G7 economies. China is at 6.1 per cent and Australia at 3.8 per cent.

Passenger trains in the US average about half the speed of Europe’s high-speed rail. Nearly 40 per cent of roads are in poor or mediocre condition. And no US airport ranks in the world’s top 25, according to Skytrax’s World’s Top 100 Airports 2026, which assesses airports on passenger experience and service quality.

With US debt continuing to mount, private capital is being eyed as a more viable solution, yet just one of about 500 passenger airports in the US is run by a private operator: Luis Muñoz Marín International Airport in San Juan, Puerto Rico.

“IFM has extensive experience investing across multiple jurisdictions, including Australia, the UK – through Manchester Airports Group – and Vienna Airport in Austria,” Whiteley says.

“We’re encouraging state governments to look at that experience – how long-term pension fund investment can deliver returns back to working people through their pension fund, and improve efficiency, passenger experience, and infrastructure. At the same time, if a state leases an airport to super funds, ownership can still remain partly with local governments. That means citizens retain a say in how the asset is managed.”

Under IFM’s management, the Manchester Airports Group (MAG) is investing $1.7 billion over the next decade to double the size of Terminal 2, supporting jobs and broader regional economic activity over time. Investment funds managed by IFM on behalf of pension and superannuation investors with a 35.5 per cent stake in MAG, still posted double-digit returns last year.

The 157-mile Indiana Toll Road is another case in point – an IFM fund managed by IFM Investors manages the concession. It was sold by the previous operator following a financial restructuring process and IFM has since invested more than $1 billion in capital improvements.

Whiteley argues that striking the balance between investment returns – which Australian funds are legislated to prioritise – and community expectations is a product of being a long-term investor. But the need to retain a social licence is central to sustainable long-term returns.

Australian expertise

Australia’s defined contribution retirement system has been mandatory for workers since the early 1990s. Employer contributions, which rose to 12 per cent of salary from July 2025, underpin inflows of nearly $2.1 billion (A$3 billion) a week. Industry funds, governed equally by employee and employer representatives, were early movers into infrastructure.

“Australian funds and US funds probably have similar allocation to private markets, but the mix is very different,” AustralianSuper outgoing CIO Mark Delaney said on a panel during the Australian Superannuation Investment Summit. “Australian funds are very heavy infrastructure, and infrastructure makes up half our private market allocation, while private equity dominates US funds’ allocations.”

Australian funds want to bring more of that experience overseas.

“Australian super funds offer long-term capital – leases of around 70 years – and when you explain that it’s workers’ retirement savings, it creates a sense of community connection,” says Whiteley.

AustralianSuper (one of the asset owner investors in IFM) set up a sizeable New York office in 2021 to oversee its growing private market allocations. Half of its $282 billion (A$410 billion) portfolio is now invested offshore and is growing quickly.

That rising investor demand is flowing into return expectations for unlisted infrastructure equity, which presents an appealing blend of low volatility, inflation hedging, and cashflows protected by high barriers to entry. Expected returns rose from 11.43 per cent in 2024 to 13.4 per cent last year – on par with private equity, according to an IFM industry survey.

The $124 billion (A$180 billion) Colonial First State (CFS) – which has almost one-third of its assets in the US but only 5 per cent in private markets – recently made its first allocation to US infrastructure, despite the challenges.

CFS CEO, super investments, Kelly Power, said working with partners who can “help us navigate some of the complexity” and “help us manage some of the risks around regional geographies, regulation and construction permits” has been “really, really important for us”.

But turbocharging those inflows will still require a regulatory overhaul and political will, according to IFM.

A roadmap built on trust

IFM has outlined areas where regulatory settings could evolve to enable greater participation by long term private capital in US infrastructure, drawing on 30 years of international experience.

It proposes a formal commitment to asset recycling: governments leasing existing brownfield assets such as roads and airports to private investors for long-term concession periods, with the proceeds redeployed into infrastructure. That strategy would be boosted by incentives paid by the federal government.

It is modelled on the 2014 Australian federal incentive payment, which offered up to 15 per cent of the value of an infrastructure asset. It delivered $22 billion (A$32 billion) in sale proceeds to state and territory governments, boosted by an extra $1.4 billion (A$2 billion) in federal incentive payments. In Sydney, the capital raised through asset recycling is estimated to have brought forward the completion of the new metro rail system by up to seven years, IFM says.

It also considers the tax treatment of municipal bonds under public-private partnership arrangements.

“Municipal bonds have always been a key issue,” Whiteley says. “States can access low-cost debt, which creates a barrier. One proposal is that existing debt could remain in place, lowering our cost of capital and reducing barriers for investors.”

IFM says that it could be addressed through administrative reform rather than congressional action.

The political pitch, Whiteley says, is less complicated than it might appear.

“Politicians mostly understand those two things: the fiduciary duties of pension funds and their own political priorities around community needs. With many US governors and mayors, often coming from private sector backgrounds, there’s a greater confidence in dealing with long-term investors like IFM and pension or superannuation funds.”

For more information visit Revitalising US infrastructure: The pension capital blueprint | IFM Investors.