Better the virtuous circle

By IPE staffJanuary 2013 (Magazine)

In theory, insurers, pension funds, endowments and other long-term investors will match their liability stream with long-term investments in the productive economy. So, over several economic cycles, their investments fund their liabilities, but their investments in government debt also help pay for the roads and schools that benefit current and future members and pensioners. Their equity and corporate-bond investments finance company growth and foster employment. Property and infrastructure investments help them attain real, inflation-linked cashflows, while also financing long-term economic expansion.