To meet the needs of ageing member bases superannuation funds are well positioned to add to the growing demand of real assets, according to TIAA Global Asset Management.
TIAA said low returns, increased asset class correlations and uncertainty over interest rates have many investors seeking opportunities outside public markets.
This is in line with Chant West's latest data that found the heavier allocation of industry funds towards unlisted assets has seen them marginally outperform their retail fund counterparts.
TIAA head of global institutional private distribution, John Panagakis, said "population growth, urbanization and rising standards of living for an emerging middle class are creating supply/demand imbalances for basic human needs such as housing, food and transportation. In turn, real assets are poised to play a key role in driving global economic growth over the coming decades".
"To keep pace with global growth, investments in infrastructure, energy, timber and farmland will be pivotal, providing many opportunities for investors," he said.
Panagakis noted the opportunity was well-timed for local super funds looking for investments to meet the needs of their ageing member bases.
"Real assets also provide an opportunity to better align investment objectives and strategy, as the time horizon for real assets typically stretches out over decades rather than quarters," he said.
"As Australian superannuation fund members move towards draw-down phase, such stable, long-term income streams are of growing importance."