Ben Hurley highlights the importance of fair value in infrastructure investments with a focus on the situation in Australian superannuation funds.
Investors face significant hurdles when measuring the performance of real infrastructure assets, with a low number of transactions per asset type and prices often kept private. It remains common global practice for investors to mark infrastructure assets to historical costs until they reach maturity, and to re-value assets once a year.
With the rising ability and willingness of Australian superannuation members to switch between funds, Australian funds have been at the forefront in developing timely valuation methods to ensure funds are transferred in a way that is open and fair, particularly with the onset of Covid-19 and Australia’s early release scheme.
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