Super to look to infrastructure: report

Amid questions over Australian funds' high exposure to shares, the Allen Consulting Group report says government policies and industry mergers are pushing funds towards backing infrastructure such as ports, roads and airports.

The report, commissioned by the Association of Superannuation Funds of Australia, said the $45 billion funds now held in infrastructure could swell to $200 billion by 2025, based on projections.

Chief executive Pauline Vamos said that after the recent wild ride for fund members caused by sharemarket volatility, growth was a reminder of the "real investments" that super funds held.

While the report did not predict a change in asset allocation, Ms Vamos said policy changes and mergers between funds made infrastructure a more viable option.

"Large funds are much more able to invest in unlisted assets because they have the ability to keep more liquidity," she said.

Government plans to allow fund members to move into retirement "seamlessly" without selling assets also encouraged funds to invest in infrastructure, she said.

"All of the indicators are there that it's going to be easier for the super pool to invest in infrastructure," Ms Vamos said.

As well, the budget provided a $200 million tax break designed to make infrastructure investment more attractive for

funds.

The report also found the government's plan to increase employers' mandatory super contribution from 9 per cent to 12 per cent would add 0.33 per cent to the economy's size in 2025.