By Jorge Otaola
BUENOS AIRES (Reuters) - Argentina's highly liquid pension funds are eyeing investments in energy infrastructure projects and real estate under new requirements this year, the head of a fund association said on Tuesday.
The pension fund system as a whole must invest some $300 million in development projects in 2008.
"We are working on projects in electrical energy and gas, largely for the private sector," said Sebastian Palla, head of the Union of Argentine Pension Funds.
"That is the first big segment. The second is real estate -- housing, office and commercial properties, especially in Buenos Aires," Palla told the Reuters Latin America Investment Summit.
Argentine pension funds have more money than local financial markets can absorb and are moving into other kinds of investments.
The capital, Buenos Aires, is experiencing a building boom as the country has dramatically recovered from its 2001-2002 economic crisis. Five years of rapid economic growth above 8 percent a year have also increased domestic demand for energy, and exposed acute shortages.
Palla said he saw the chances of greater consolidation in the $30 billion industry made up primarily of smaller, Argentine-owned funds and larger, foreign ones.
"There could be a process of mergers or acquisitions," he said. "But I don't imagine a big change in players." Continued...
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