Infrastructure leasing or sale can encourage pension funds to invest domestically

Major pension funds have built trillions in assets by pursuing high-performing portfolios and maintaining independence in their investment decisions. Recently, however, discussions have emerged about imposing mandates that would require these funds to allocate more capital domestically—a trend not limited to Canada, as countries like Sweden have considered similar measures.

While the intent may be patriotic, such mandates risk undermining the autonomy that has driven these funds’ success. As Prof. Sebastien Betermier notes in IPE, this approach is akin to taxing pensioners’ wealth. Instead of enforcing rules, governments should create attractive opportunities for domestic investment. One effective strategy is to lease or sell infrastructure assets—such as transmission grids and power plants—which offer characteristics that appeal to pension funds.