Reuters Summit-Argentine pensions funds eye energy, real estate

(For other news from the Reuters Latin America Investment Summit, click here)

BUENOS AIRES, April 1 (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 American Investment Summit.

Argentine pension funds have more money than local financial markets can absorb and are moving into other kinds of investments.

Palla also said he saw the chances of greater consolidation in the industry made up primarily of smaller, Argentine-owned funds and larger, foreign ones.

The main pension providers in Argentina are BBV Banco Frances (FRA.BA: Quote, Profile, Research) -- a unit of Spain's BBVA (BBVA.MC: Quote, Profile, Research), HSBC (HSBA.L: Quote, Profile, Research), U.S. insurance firm MetLife Inc (MET.N: Quote, Profile, Research), Dutch financial group ING Group (ING.AS: Quote, Profile, Research)(ING.N: Quote, Profile, Research), as well as state bank Banco de la Nacion.

(For summit blog: summitnotebook.reuters.com/)