Infrastructure investments: opportunities for stable cash flows

In an environment of historically low interest rates and rising market volatility, pension funds are under pressure to generate stable and predictable returns. Infrastructure investments offer an attractive addition to pension fund portfolios.

Pension funds pursue a clear goal: long-term financial security for their insured members. However, traditional asset classes such as government or corporate bonds hardly generate any returns in Swiss francs, while volatile equities offer little stability in times of market fluctuations. This is why investments such as infrastructure are gaining in importance. In the past, they have been characterized by stability, attractive returns and protection against inflation.

Like real estate, most infrastructure investments are tangible assets. They include, for example, data centers, fiber optic networks and renewable energy facilities. Such investments generate stable, often inflation-protected cash flows over many years.

Stability and returns – a powerful combination

An analysis of the years 2015 to 2025 shows that infrastructure investments generated particularly attractive net returns compared to traditional asset classes. This additional return is generated not least by the so-called illiquidity premium: since capital is usually tied up in infrastructure projects for 10 to 15 years, investors are compensated with a premium. This is ideal for the long-term orientation of pension funds.

What to consider when investing in infrastructure

Despite their advantages, infrastructure investments are not a sure-fire success. It is advisable to choose a professionally managed fund for this purpose. There are a number of factors to consider: these investments are not usually tradable on a daily basis, and redemptions during the term are only possible under certain conditions.

Political or regulatory changes can also influence projects. It is therefore advisable to invest specifically in stable markets, particularly in OECD countries, and to ensure broad diversification. Furthermore, careful selection of projects and forward-looking risk management are essential.

Easy access for Swiss pension funds: AXA Vorsorge Private Infrastructure Fund

AXA Switzerland is focusing on infrastructure investments – including for its own pension fund. The AXA Vorsorge Private Infrastructure Fund gives Swiss pension funds access to a diversified, manager-independent portfolio of high-quality infrastructure projects.

The fund is specifically tailored to the needs of Swiss pension funds. Investments are made specifically in OECD countries, with AXA consistently pursuing a best-in-class approach: attractive projects selected by investment managers who have been vetted and hand-picked by AXA.

An additional advantage: thanks to AXA's economies of scale and purchasing power, investors benefit from attractive fee structures.

An investment with an attractive risk/return profile

Infrastructure investments combine physical assets with long-term, stable returns. They offer pension funds the opportunity to improve their risk/return profile and diversify their portfolio.

The AXA Vorsorge Private Infrastructure Fund makes it easy to access this asset class – professionally managed, efficiently structured and tailored to the needs of Swiss pension funds.