US pension fund explores $2bn infrastructure investment

New Jersey is exploring whether to make infrastructure investments as a hedge against inflation to boost its $81.2bn (€60.4bn) pension fund.

Strategic Investment Solutions, a California-based consultancy, advised New Jersey's investment council to put up to $2bn in infrastructure assets.

Mark Perkiss, a treasury spokesman, said New Jersey has not yet made a decision on specific infrastructure investments, but the pension fund is likely to put the money into private equity funds and could include global infrastructure assets such as toll roads and airports.

New Jersey currently owns 32 million shares valued at $190m in private equity infrastructure firms Cintra and Macquarie Infrastructure Group. These companies own a 75-year lease for Indiana’s toll road which they purchased last year for $3.8bn. They also own a 99-year lease for the Chicago Skyway, an eight mile toll road valued at $1.8bn.

New Jersey Governor Jon Corzine has repeatedly urged state representatives to explore leasing or selling the state’s own infrastructure assets such as the Atlantic City Expressway and the state lottery to reduce its debt burden.

Earlier this year an actuarial assessment revealed a $26bn shortfall in the pension fund.

Separately, Pennsylvania is considering a recommendation from Morgan Stanley to lease the state’s toll road. Morgan Stanley's analysis estimated the Pennsylvania Turnpike lease could be worth up to $3.6bn for a 30-year lease and up to $20bn for a 99-year lease.

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