Industry experts have raised concerns over the role of legislation and government in the future of investing in infrastructure, warning that trustees must focus on returns.

Speaking in a panel session at the PLSA Investment Conference, Mercer partner and chief investment officer, Wayne Fitzgibbon, emphasised that trustees should focus on earning a return, rather than focusing on aspects that are “socially worthwhile”.

Fitzgibbon explained: “The thing that concerns me is that as regulation becomes more paternalistic, there’s always a risk that governments might start telling you exactly what type of infrastructure to invest in, and there's a fine line there.

"I do believe that if you're investing in infrastructure as a pensions trustee, you do still need to focus on getting a return, it shouldn’t just be something that the government wants pension schemes to fund…Government should fund it, not pension schemes.

“You really have to focus on earning the right return for the risk, rather than simply investing in infrastructure cause it sounds good or is socially worthwhile."

However, fellow panelist and Nest head of private markets and investment proposition, Stephen O’Neill, added that government support can play a role in breaking down potential barriers that schemes face when investing in infrastructure.

He said: “The government has helped a huge amount in the last 18 months by breaking down barriers, by facilitating the conversation around patient capital, encouraging the Financial Conduct Authority to look at permitted links, encouraging the department to look at the charge cap and calculation methodology.

"If it’s pulling down barriers than that’s obviously, there’s no debate that’s a good thing, but if its creating perverse incentives, then perhaps less so.”

Pensions minister, Guy Opperman, emphasised the governments support for infrastructure investing in his keynote speech at the conference.

He stated: "I don’t think you should be under any illusions after the election on 12 December, that investment in infrastructure and illiquids is something the government is passionate about.

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