Australia’s largest pension scheme is set to sink £23 billion into private markets in the UK and Europe over the next five years in a search for returns, according to a report in the Financial Times.
AustralianSuper is an “industry fund” with a membership covering around one in ten workers in Australia. It manages A$244 billion (£128 billion) on behalf of its 2.5 million members and has plans to double its UK assets from £7 billion to more than £15 billion by 2026.
Over the same period, the fund will increase its European investments from £12.6 billion to £28 billion.
This will maintain the allocations within its current proportions, as compulsory pension contributions are expected to drive assets under management to around A$570 billion by 2026.
The fund already invests more than half its assets offshore, with holdings in UK assets such as Heathrow airport and London’s King’s Cross redevelopment project.
It is targeting high quality sustainable – and preferably carbon neutral – mixed use real estate investments. The government’s levelling up agenda and booming clean tech sectors present many other opportunities in both the UK and Europe. Private credit is also being considered.
AustralianSuper’s expansion will lead to a doubling of its London office headcount from 50 to 100 and is beefing up its team with high profile talent with proven track records.