MELBOURNE • Australia’s largest pension fund plans to open an office in New York and expand in London as it outgrows its local market and seeks more investment opportunities overseas.
Mark Delaney, the CIO of AustralianSuper Pte Ltd, said the more than A$155 billion (RM449.5 billion) fund will have 30 employees in New York by 2022, focusing on property, infrastructure and private equity investments.
Its London office, currently home to about 10 staff, will grow to around 50 by the same date, with a focus on property, infrastructure and foreign exchange dealing, he said in an interview.
With the fund on track to double in size over the next five years, Australian Super is shifting more of its money offshore and ultimately expects to have two-thirds of its portfolio invested outside Australia.
In a drive to cut management costs, the fund has been building up in-house teams for much of its Australian and global equities investments, and wants to boost its capabilities in unlisted asset classes.
“The next phase going forward is we’re going to have to deploy money overseas in private markets,” Delaney said in Melbourne last Friday. “And that really has to be an on-the ground function.”
The fund opened its London office in 2016 as it took a majority stake in the King’s Cross redevelopment project.
It also holds stakes in Manchester Airport, the M6 Toll road and Anglian Water.
The London office will house AustralianSuper’s offshore dealing team responsible for global equities and currency, given there’s more volume during European trading hours, Delaney said.
The fund handles about A$500 billion in foreign currency transactions each year, he said.
“Execution is a skill-set in itself and London is the biggest market for execution,” Delaney said.
“We’ll get the chance to get an all round better execution outcome by locating there.”
In New York, the focus will be on infrastructure and private equity investment.
AustralianSuper is just one of several funds in Australia’s A$2.65 trillion pensions savings pool hoping to get a slice of US President Donald Trump’s infrastructure push.
The fund now has a 300-strong investment team in Australia, which is cutting costs by about A$200 million a year.
It’s targeting to have about half of its investments managed in house by 2021, up from about 40% in May.
AustralianSuper returned around 10.1% a year in the three years through March 31.
AustralianSuper is growing exponentially as people shift retirement savings from bankowned funds whose reputation was sullied by a year-long inquiry into finance industry misconduct.
The fund had inflows of A$1.3 billion between December and February, two-thirds of which came from AMP Ltd or bank-owned funds, it said in March. — Bloomberg