Australian pension fund giant IFM Investors said it will buy the bankrupt operator of a large Midwest toll road for $5.7 billion including debt, its biggest acquisition and Australia's fourth largest purchase of a U.S. firm.

The deal advances Australia's standing in the global race for established infrastructure as pension and sovereign funds compete for assets in well-regulated markets with predictable long-term returns.

Australian pension funds alone have some A$1.7 trillion ($1.3 trillion) to invest, far more than the A$100 billion that the country's government has earmarked for sale, leaving the likes of IFM looking offshore to build up their portfolios.

IFM Chief Executive Brett Himbury told Reuters the fund would be taking on less debt than the current owners of the 157-mile Indiana Toll Road, who borrowed money to fund 80 percent of the acquisition cost. He declined to give more details on the debt-equity split.

Himbury added that revenue for the road, which has 66 years left on its lease, was on the increase. Nicknamed the Main Street of the Midwest, it links Chicago with the largest cities on the eastern seaboard.

"The mix of traffic may have changed, probably the level of private users may have changed, but it's been very resilient from a freight perspective and freight has the bigger tolls," he said.

The road had attracted interest from some of the world's largest pension funds and infrastructure investors, unfazed by the failure of one of the largest privatizations of U.S. infrastructure.

Its current owner, a firm co-owned by affiliates of Australian investment bank Macquarie Group Ltd and Spain's Ferrovial SA, paid the state of Indiana $3.8 billion for the road in 2006. But the firm filed for bankruptcy in September 2014 with $6 billion in debt, citing depressed trucking activity.

Himbury said that despite the size of the latest U.S. acquisition, IFM is keen on local deals as the Australian government seeks to sell ports and energy assets around the country to raise cash.

IFM, which has $42 billion assets under management, is owned by 30 Australian pension funds but most of its investors are U.S. pension funds. In January, it bought a quarter stake in toll road firm OHL Mexico for $605 million. It is also Australia's biggest owner of airports.

Shares in Macquarie rose 3 percent while stock in unit Macquarie Atlas Roads Group, which had a quarter stake in the U.S. road, rose 1 percent in line with the broader market.

($1 = 1.3175 Australian dollars)