Cbus has co-invested in excess of $140 million with IFM Investors Global Infrastructure Fund into the Indiana Toll Road (ITR), as it tailors its allocations as part of an overall portfolio strategy.

IFM acquired a 100 per cent equity interest in the toll road’s concessionaire and operator, ITR Concession Company, at an enterprise value of $US 5.7 billion in May 2015 on a 66-year lease.

The ITR co-investment is the second-largest infrastructure exposure for Cbus after NSW Ports — Port Botany and Port Kembla.

Grant Harrison, investment manager of private markets at Cbus, said the fund had a strong foundation of pooled-fund investments, however, when looked at together it was possible to identify areas where the portfolio could be optimised.

He added that going forward co-investments provided an opportunity to tailor the composition of the portfolio to promote better risk/return outcomes for members.

“We saw we could benefit from increased exposure to toll roads and we could benefit from increased exposure to the US,” Harrison said. “Also it provides us opportunity from a fee perspective. It’s an opportunity for us to get better fee outcomes for our members.”

The investment gives the super fund certain governance rights of the ITR, but as the percentage of ownership is small a Cbus representative is not on the board.

Harrison added more co-investments were a key part of the infrastructure strategy.

Towards this end the super fund is in the process of hiring a specialist infrastructure manager to work internally with Harrison.

“The aim there is for that person to provide us with additional capability and bandwidth to continue to pursue our co-invest strategy, and also to consider different types of co-investment structures as well. That’s the key purpose for that additional resource.

“One area of focus, and it’s not immediate, maybe PPPs [public–private partnerships]. We are investigating various options to gain access to those types of investments.”