AustralianSuper earmarks additional A$13bn for PE

AustralianSuper retirement fund in Melbourne, Australia’s largest retirement savings fund with approximately A$260 billion ($182.5 billion) in assets under management, plans to increase its global private equity investments by A$13 billion ($9.1 billion) over the next two years to enhance its investment returns, according to a news release.

The fund will invest A$9.5 billion ($5.7 billion) of the new allocation in the U.S., where the fund is targeting a range of sectors including healthcare, technology, industrials, consumer, and financials.

AustralianSuper will increase its allocation to private equity from 5% currently to 7% by 2024 as part of its strategy to increase its investment in unlisted assets. The fund plans to raise it total private equity investments to A$26 billion ($18.25 billion) over the next two years to help drive its  long-term performance.  Its private equity portfolio is expected to rise to A$50 billion ($35.1 billion) within five years.

“We have a compelling offer. Not only can we act quickly and deploy large amounts of capital, but we can also bring considerable value to the process by leveraging the deep sector expertise of a 70-person strong global listed equities capability that manages over $143 billion,” Terry Charalambous, head of private equity, stated in the release.  He added that “to help implement the Fund’s strategy, our U.S. based private equity team will grow to 20 members in the next few years, focused on strengthening relationships with well-aligned investment partners and sourcing compelling long-term investment opportunities.”

The fund has adopted a three-pronged investment approach: investing in General Partner (GP) funds, investing alongside GPs in co-investment and co-underwriting opportunities, with a strong focus on identifying best-in-class managers, and collaborating with them to build a relationship that will enable it to invest across all our strategies over the long term.

AustralianSuper will invest in a diversified portfolio, both by investment style and type, and sector. ‘The Fund is working with leading GPs to source opportunities, including management buyouts, growth equity financing and public to private transactions. The fund has A$72 billion invested globally, which is targeted to grow to A$100 billion by June 2024.

Mark Fortune

Mark Fortune has more than 30 years of experience as a financial writer and editor, with a focus on institutional investment management. He has worked in various editorial roles at organizations that include Institutional Investor, Pageant Media, Markets Group and, most recently, at New York investment management firm Cohen & Steers.

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