GLOBAL - Pension fund investors still see unlisted equity as the "commonsense" route to infrastructure investment, despite a lack of common definitions, according to the OECD.

A poll of 52 large pension fund investors - including PGGM, ABP and Danish scheme ATP - showed 28 had invested in infrastructure primarily in a diversification trend the organisation described as "prudent".

Yet measured against the total sample, infrastructure investments via unlisted equity and fixed income vehicles accounted for just 0.5% of pension funds' overall portfolios.

But OECD economists found that the total masked significant variation between regions and schemes, from Canadian and Australian pension funds with allocations of 20% to European schemes with initial allocations of 1-3%.

Unlisted equity, including infrastructure funds and direct investment, accounted for $38bn (€29bn), or 2.6% of overall portfolios, in 2011 compared with fixed income, which accounted for $3.9bn, 0.3%.

The OECD claims its new data plug a gap left by national agencies, covering investments made into infrastructure as a separate asset class and those made incidentally - in infrastructure equities, for example.

Of the data released ahead of a working paper to be published next week, OECD economist Raffaele della Croce said: "Pension funds are not necessarily investing in the same thing when they invest in infrastructure.

"A Portuguese pension fund that invests in a utility is making an equity investment that happens to be in infrastructure, in contrast to a Canadian pension fund that invests in an unlisted project.

"They are very different propositions. If you want to measure and understand pension fund investments in infrastructure, you first need to distinguish how they are looking at it."

Although scheme size is a significant indicator of the likelihood that a pension scheme will view infrastructure as a separate asset class, experience and available investment opportunities also count.

In infrastructure, as in real estate, della Croce pointed to a domestic bias among pension funds investing in the asset class for the first time.

He also pointed to "common wisdom" that stable, long-term cash flows were more likely to come from unlisted equity than listed infrastructure investments.

"Liquidity is an issue for many pension funds - Australian defined contribution funds, for example - but diversification, the need to grow assets and the need to deploy capital are also issues," he said.

"They're all conditions driving investment in alternatives in general and infrastructure in particular."