By Raul Zorrilla
Chile’s congress approved the so-called productivity bill, which opens up new investment alternatives for local pension funds.
Under the legislation, 5-15% of a pension fund’s value can be invested in non-traditional assets. As of June, this could equate to up to US$25bn if all funds invest the maximum amount, according to the local pension regulator SP.
Pension funds will, for example, be allowed to invest in stakes in infrastructure concessionaires, in investment fund bonds and in real estate and infrastructure assets.
The limit on investments in local investment funds will also be raised.
There have been no placements yet of bonds issued by investment funds in the local market, however “the potential is ample, given the development of the local investment funds industry,” according to the SP.
In March there were 223 public investment funds with a total of US$13.4bn in assets under management, according to information from the local association of investment funds managers Acafi.
A notice is due to be published in the official gazette this month and the legislation is due to enter force on November 1.
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