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A Balance of Pension Fund Infrastructure Investments: The Experience in Latin America

Author

Listed:
  • Javier Alonso
  • Jasmina Bjeletic
  • Carlos Herrera
  • Soledad Hormazabal
  • Ivonne Ordonez
  • Carolina Romero
  • David Tuesta

Abstract

The purpose of this study is to create a detailed account of what Latin American pension funds have meant to the financing of infrastructures, with the purpose of serving as a basis for reflection regarding potential improvements to optimize the portfolios of pension funds and accomplish a greater contribution of retirement savings to the evelopment of countries. The involvement of pension funds in infrastructure is a recommended strategy for managed portfolios based on the criteria establishing that they should be an attractive investment for future pensions, and thus must reach an adequate balance between return and risk. Likewise, given the importance of infrastructure in development, we see that a more significant involvement of pension funds also constitutes a desirable goal because it implies not only greater private benefits for owners of retirement savings (affiliates), but also for society as a whole. In order to perform a complete analysis, we study the evolution and traditional forms of participation in the financing of infrastructure, identifying strengths as well as weaknesses to be corrected. Existing processes are also described, which have assisted to a greater or lesser extent in the involvement of the private sector through concession laws in these countries. Finally, we discuss the different tools that the current systems depend on which allow the involvement of pension funds, as well as how these processes have been carried out up to this moment and the opportunities foreseen.

Suggested Citation

  • Javier Alonso & Jasmina Bjeletic & Carlos Herrera & Soledad Hormazabal & Ivonne Ordonez & Carolina Romero & David Tuesta, 2010. "A Balance of Pension Fund Infrastructure Investments: The Experience in Latin America," Working Papers 1003, BBVA Bank, Economic Research Department.
  • Handle: RePEc:bbv:wpaper:1003
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    References listed on IDEAS

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    2. Marianne Fay & Danny Leipziger & Quentin Wodon & Tito Yepes, 2003. "Achieving the Millennium Development Goals : The role of infrastructure," Policy Research Working Paper Series 3163, The World Bank.
    3. Israel Fainboim Yaker & Carlos Jorge Rodríguez & Juan Benavides & Julio César Alonso, 2001. "Participación Privada en Proyectos de Infraestructura y Determinantes de los Esquemas Contractuales Adoptados: El Caso Colombiano," IDB Publications (Working Papers) 2115, Inter-American Development Bank.
    4. Eduardo Engel & Ronald Fischer & Alexander Galetovic, 2006. "Renegotiation Without Holdup: Anticipating Spending and Infrastructure Concessions," Working Papers 937, Economic Growth Center, Yale University.
    5. Carlos Pombo & Manuel Ramirez, 2002. "Privatization in Colombia: a plant performance analysis," BORRADORES DE INVESTIGACIÓN 003377, UNIVERSIDAD DEL ROSARIO.
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    7. Christophe Kamps, 2005. "The Dynamic Effects of Public Capital: VAR Evidence for 22 OECD Countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 12(4), pages 533-558, August.
    8. Javier Alonso & David Tuesta & Jasmina Bjeletic & Carlos Herrera & Soledad Hormazabal & Ivonne Ordonez & Carolina Romero, 2009. "Proyecciones del impacto de los fondos de pensiones en la inversion en infraestructura y el crecimiento en Latinoamerica," Working Papers 0921, BBVA Bank, Economic Research Department.
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    Cited by:

    1. Javier Alonso & Jasmina Bjeletic & David Tuesta, 2010. "Reasons to justify fees on assets in the Peruvian private pension sector," Working Papers 1024, BBVA Bank, Economic Research Department.
    2. Mosolygó, Zsuzsa, 2010. "A tőkefedezeti rendszer alapkérdéseinek új megközelítése
      [A new approach to the basic issues raised by the PAYE system]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 612-633.
    3. Angel De la Fuente, 2011. "Human capital and productivity," Working Papers 1103, BBVA Bank, Economic Research Department.

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