Wharton Pension Research Council Working Papers

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Working Paper

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One remarkable fact distinguished in the global financial regulation picture is a growing openness of pension funds to investments in infrastructure projects. This chapter analyzes why investing in infrastructure is gaining momentum. We explore the pros and cons for pension investments in infrastructure projects, the regulatory changes taking place, and the relevance of the regulatory framework for changing preferences for this alternative asset. We perform a panel data analysis to test the importance of the financial regulatory stance for pension fund decisions to invest in infrastructure. Our results show that, although financial regulatory restrictions on pension funds to invest in infrastructure could be important, there are also other important determinants, such as the institutional framework and factors related to the depth and strength of the financial markets. Geographical considerations are also important. In a nutshell, if governments seek to spur more involvement of pension funds in infrastructure, a broader policy recipe will be required.


The published version of this Working Paper may be found in the 2016 publication: Retirement System Risk Management.


Pension fund, investment, infrastructure, regulation

Working Paper Number


Copyright/Permission Statement

All findings, interpretations, and conclusions of this paper represent the views of the authors and not those of the Wharton School or the Pension Research Council. © 2015 Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.



Date Posted: 12 March 2019