Real estate and infrastructure are becoming an alternative to bonds, say Canada’s pension fund leaders.

“There’s a thirst for yield that people are looking at those assets as a substitute for fixed income,” said André Bourbonnais, president and CEO of PSP Investments, at the Bloomberg Economic Series Canada conference in Toronto on Thursday.

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Ron Mock, president and CEO of Ontario Teachers’ Pension Plan, noted that real estate and infrastructure offer stable and long-term cash flows with reasonable returns.

In some cases, he said real estate “starts to look like a bond that delivers a 5% rate of return while you’re holding it.”

Michael Sabia, president and CEO of the Caisse de dépôt et placement du Québec, said the fund recently bought an office tower in Manhattan because “we think about that building as a bond.”

Read: Caisse partners up on US$2.2-billion deal

As real assets like infrastructure have become more popular, he noted the market has become very crowded.

Mock said more investors are investing in infrastructure, with 235 pools looking at deals in 2013 compared to just 10 in 2001.

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