EPFO to invest part of corpus in InvITs: Report

Through InvITs, infrastructure projects can raise long-term funds from pension funds.

The Employees' Provident Fund Organisation (EPFO) is planning to begin investing a part of its annual deposits in InvITs.

The EPFO's move to invest in InvITs is aimed at boosting investments in infrastructure. Moreover, this will also help the retirement fund manager to expand the scope of its investment beyond bonds, government securities and exchange-traded funds (ETFs), officials told Mint.

Moneycontrol could not independently verify the report.

Read: All you need to know about provident funds

Similar to mutual funds, an Infrastructure Investment Trust (InvITs) enables individual/institutional investors to invest small amounts of money in infrastructure to earn a small portion of the income as a return.

"Among Alternative Investment Funds (AIF), InvITs are a good option. There is a demand for long-term funds in the larger infrastructure sector. It also offers a diverse mix to EPFO to look beyond its traditional investment vehicles," one of the two officials told the publication.

Also read: InvITs and REITS: Time to turn a new leaf

Another official said that, through InvITs, infrastructure projects can raise long-term funds from pension funds.

Infrastructure funds, SME funds and social venture funds are some of the options in the category one segment of the AIF and governed by SEBI. The government has allowed EPFO to invest a part of its corpus in these instruments, the report said.

"The alternative investment fund gives us a wider option to park our deposits. Though InvITs are available in private and PSU space, EPFO can weigh the options and may look at PSU InvIT if our central board decides to look at only the government sector," the second official said, as per the report.