AustralianSuper predicts AUS $ 5 billion overseas spending surge
AustralianSuper is set to embark on a wave of Australian $ 5 billion ($ 3.7 billion) international spending and increase its presence in London as the giant pension fund scours the market in search of ‘investment opportunities.
The A $ 230 billion fund, whose 2.3 million members represent more than 1 in 10 of the Australian workforce, plans to increase the number of employees in its London office from 38 to 90 by the end of 2023, as he seeks deals in infrastructure and private debt.
The move follows the opening last month of an Australian office in Super New York, a key part of its plans to roll out AU $ 5 billion on overseas transactions over the next 12 months.
“These will be very large offices, it won’t be just three or four people,” Mark Delaney, chief investment officer, told the Financial Times in an interview. “And then it will get even bigger beyond 2024-25.”
AustralianSuper employs approximately 170 investment professionals at home and abroad.
The fund’s ambitions to grow its offshore staff to over 200 over the next few years come as other oversized global pension plans seek to increase their investments in private markets to escape the effect of low interest rates. on member returns.
Illiquid assets, such as real estate, infrastructure and private equity, have the potential to generate higher and more regular returns for pension plans than traditional liquid assets of pension funds, such as stocks and listed bonds.
Earlier this month, the Ontario Teachers’ Pension Plan, one of the largest pension plans in the world, announced plans for a C $ 70 billion (C $ 55 billion dollars) in international private markets, covering assets ranging from infrastructure to real estate.
“With a decent overseas presence, you can trust them (the staff) to identify and assess and do all the tough work on the deals,” said Delaney, whose Australia-based staff have been subjected to strict travel restrictions under the country Covid- 19 quarantine policies. “Australians don’t have to fly back and forth all the time.”
AustralianSuper has invested over A $ 100 billion in the Australian economy, ranging from blue chip companies to ports and real estate developments, and is the largest active investor in the Australian stock market.
But Delaney said the fund was considering further international expansion as deals appeared “attractive” overseas, particularly in infrastructure and private debt.
“We love the infrastructure. We’ve loved infrastructure for a long time, ”said Delaney. “There are many opportunities around the world in infrastructure; it’s competitive, but there are a lot of opportunities because every country has infrastructure. “
On private debt, Delaney said AustralianSuper would seek deals “in areas where we have experience”.
“The spreads have increased a lot, so we probably won’t be racking up as much money as we were two or three years ago because the cash rates are low and the spreads are low.”
Timo Schmid, managing director and partner of the Melbourne-based Boston Consulting Group, said it was important for pension funds to have “boots on the ground” in targeted geographic areas.
“You need a critical mass in terms of investment professionals to nurture transaction leads and develop relationships between sectors over 24 to 36 months before you actually see transactions happen,” he said. declared. “Canadian pension funds have shown that a strong market presence abroad is the best way to enter the local business flow. “