Pension and endowment funds are now allocating an increasing share of their portfolio assets to infrastructure investments, in an attempt to increase returns and better manage risk through portfolio diversification. These funds are increasingly looking for longer-term assets that provide a better match to their liabilities. So far, much of this investment has gone to projects in other countries.
This is partly because the domestic markets for PPP in these other countries are more developed than ours. In Canada, we currently see three conditions that present us with a vital opportunity. We have governments that are committed to investing in infrastructure, a private market with an appetite for longer-term financial assets, and a pent-up need for those investments in Canada.