AustralianSuper will enter an international spending of $ 5 billion ($ 3.7 billion) and increase its presence in London as the giant pension fund sweeps the market for investment opportunities.
The $ 230 billion fund, whose 2.3 million members account for more than 1 in 10 of the Australian workforce, plans to increase the number of staff in its London office from 38 to 90 by the end of 2023, as it slows business in infrastructure and private debt.
The move follows the opening last month of an Australian Super New York office, a key planet in its plans to implement $ 5 billion on overseas offerings over the next 12 months.
“They’re going to be very important offices, not just three or four people,” Mark Delaney, head of investment, told the Financial Times in an interview. “And then it will get even bigger beyond 2024-25.”
AustralianSuper employs about 170 national and overseas investment professionals.
The fund’s ambitions to build its offshore staff to more than 200 in the coming years come as other oversized global pension plans seek to increase investment in private markets to escape the effect of low interest rates. interest in the performances of the members.
Illegal assets, such as property, infrastructure and private equity, have the potential to provide higher and regular returns for pension schemes than the traditional assets of liquid pension funds, such as listed shares and bonds.
Earlier this month, the Ontario Occupational Pension Plan, one of the world’s largest pension plans, announced plans for a $ 70 billion ($ 55 billion) boost in pensions. international private markets, which extend from activity from infrastructure to real estate.
“With a decent overseas presence you can rely on (staff) to identify and assess and do all the hard work on the business,” said Delaney, whose Australian staff has been subjected to strict travel restrictions Covid framework- 19 quarantine policies. “Australians don’t need to turn back and forth all the time.”
AustralianSuper has more than $ 100 billion invested 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 looking at a new international expansion that would make businesses look “attractive” offshore, particularly in infrastructure and private debt.
“We like the infrastructure. We’ve enjoyed infrastructure for a long time, ”Delaney said.“ There are so many opportunities in the world in infrastructure; it is competitive, but there are many opportunities because every country has the infrastructure. »
On private debt, Delaney said AustralianSuper will seek to do business “around the areas in which we have experience”.
“Spreads are coming in a lot, so we probably won’t be stacking up as much money as we were two or three years ago because cash rates are low and spreads are low.”
Timo Schmid, managing director and partner with the Boston Consulting Group in Melbourne, said it was important for pension funds to have “boots on the ground” in targeted geographies.
“You need a critical mass in terms of investment professionals to nurture business tracks and develop relationships in all sectors over 24-36 months before you actually see transactions happen,” he said. “Canadian pension funds have shown that material presence in the overseas market is the best way to get into the flow of local business.”