New York City Comptroller William Thompson Jr. is looking at infrastructure as an investment for the city's pension funds, he said yesterday.

"Such an investment could help further diversify our portfolio and fulfill our fiduciary goals in terms of return on investment, while addressing the urgent need to repair and expand our roads, bridges, power plants, and schools," Thompson said at a breakfast forum in Manhattan sponsored by Crain's New York Business.

Thompson oversees five pension funds for city employees with assets of approximately $105 billion. He said he is in discussions with the pensions' trustees about the idea.

"There is real money in infrastructure," he said. "It's one of those instances where looking at it as fiduciaries we believe it will generate a real return for our pension funds."

The comptroller's office has yet to develop a comprehensive strategy for infrastructure investments and does not yet have a timeline for investment or a target amount that it would invest. A decision has not been made whether the investment would include public-private partnerships.

The pension funds would probably not invest directly in specific projects or in municipal bonds but in infrastructure funds that invest in projects in the city, state, and the whole country, Thompson said.

He pointed to California as an example of what pension funds around the country are considering.

In August, the California Public Employees' Retirement System approved investment guidelines to invest up to 3% of its $234 billion portfolio in infrastructure by 2010. CalPERS guidelines target an average annual return of 5% over the rate of inflation and net fees over five years and can invest in both public and private infrastructure.

Earlier this year, the pension funds invested $150 million in infrastructure through the Emerald Infrastructure Development Fund LP, which is investing in alternative and conventional energy, waste management, and property development in Northern Ireland and alternative energy and environmental projects in North America.

Thompson also said the city should consider public-private partnerships to meet its infrastructure needs but said that at the moment it is focused on the investment side of things rather than looking at assets the city could privatize.

New York Gov. David Paterson formed a task force last month to study public-private partnerships, including the possibility of a P3 to finance the construction of a new $16 billion Tappan Zee Bridge. The state's needs are vast. New York's transportation assets alone need $175 billion of investment over 20 years, transportation commissioner Astrid Glynn said last year.

The state pension fund has not jumped into infrastructure and public-private partnership investments.

"We're looking at this as a potential emerging investment opportunity, but our mood right now is still cautious," said Robert Whalen, spokesman for state Comptroller Thomas DiNapoli, who is the sole trustee of the state's $153.9 billion pension fund. "We're still waiting for this to evolve and mature a little bit more."

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