The AFPs are coming late to the party. Banks, insurance companies and even foreign pension funds have been able to invest directly in infrastructure projects, property and private equity in Chile for a number of years.
"In my opinion, this could have happened before," Macias said. "Canadian pension funds, for example, noticed that returns were higher in emerging markets and did what we are doing now many years ago."
Chilean pension fund returns averaged 12.3 percent in the 1980’s, 10.4 percent in the 1990’s, 6.3 percent in the 2000’s and just 4.3 percent since 2010.
The new rules will demand that exposure to so-called alternative assets increases to at least 5 percent of pension fund portfolios, from less than 3 percent at the moment.
The AFPs currently have to invest in these assets through specialist investment funds.
"Direct investment in infrastructure or private companies is not the same as buying in the stock market in New York or London," Macias said. "Pension funds will have to decide if they want to compete by themselves or keep using intermediaries."