As giant pension funds look for investment opportunities in the market, AustralianSuper will start an international spending spree of A$5 billion (US$3.7 billion) and increase its business in London.
This A$230 billion fund has 2.3 million members, accounting for more than one-tenth of the Australian workforce. The fund plans to increase the number of employees in its London office from 38 to 90 by the end of 2023 in order to seek infrastructure. Transactions and private debt.
Previously, AustralianSuper’s New York office opened last month, which is a key part of its plan to deploy A$5 billion in overseas transactions in the next 12 months.
Chief Investment Officer Mark Delaney said in an interview with the Financial Times: “They will be very important offices, not just three or four people.” “Then it will be after 2024-25. Become bigger.”
AustralianSuper has approximately 170 investment professionals at home and abroad.
The fund’s ambition is to increase the number of offshore employees to more than 200 in the next few years As other super-large global pensions The plan seeks to increase investment in the private market to avoid the impact of low interest rates on member returns.
Compared with traditional liquid pension fund assets (such as listed stocks and bonds), illiquid assets (such as real estate, infrastructure, and private equity) have the potential to bring higher and more regular returns to retirement plans.
At the beginning of this month, Ontario Teachers’ Pension PlanOne of the largest retirement plans in the world, announced plans to invest 70 billion Canadian dollars (55 billion U.S. dollars) International private market, Covering assets from infrastructure to real estate.
Delaney said: “With a decent overseas business, you can trust them (staff) to identify and evaluate and do all the hard things for the transaction,” Delaney said as part of the country’s Covid-19 isolation policy. “Australians don’t have to fly back and forth all the time.”
AustralianSuper has invested more than 100 billion Australian dollars in the Australian economy, ranging from blue chip companies to port and real estate development, and is the largest single active investor in the Australian stock market.
But Delaney said the fund is looking at further international expansion because offshore transactions look “attractive”, especially in terms of infrastructure and private debt.
“We like infrastructure. We have always liked infrastructure for a long time,” Delaney said. “There are many opportunities in the global infrastructure sector; it is competitive, but there are many opportunities because every country has infrastructure.”
In terms of private debt, Delaney stated that AustralianSuper will seek to trade “around areas where we have experience”.
“The spread is huge, so we may not invest as much money as we did two or three years ago, because the cash interest rate is very low, and the spread is also very low.”
Timothy Schmid, managing director and partner of Melbourne-based Boston Consulting Group, said it is very important for pension funds to “land” in target areas.
“In the 24 to 36 months before you actually see the transaction happening, you need to invest in a key number of professionals to cultivate trading leads and develop cross-departmental relationships,” he said. “The Canadian Pension Fund has shown that the substantial presence of overseas markets is the best way to enter the local transaction process.”