AustralianSuper boosts private equity investments by $13bn

AustralianSuper will invest $13 billion into private equity globally over the next two years and grow its US-based team to deliver strong long-term returns for members.

About $9.5 billion of this capital is planned to be invested in the US where the fund is targeting a range of sectors including healthcare, technology, industrials, consumer and financials.

AustralianSuper's head of private equity Terry Charalambous said the fund will increase its allocation to private equity from 5% today to 7% by 2024. This move is reflective of AustralianSuper's strategy to increase its investment in unlisted assets.

On the increase in private equity investments, Charalambous said: "Not only can we act quickly and deploy large amounts of capital, but we can also bring considerable value to the process by leveraging the deep sector expertise of a 70-person strong global listed equities capability that manages over $143 billion."

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To help drive AustralianSuper's long-term performance the fund's overall private equity investment will lift to $26 billion over the next two years. Furthermore, AustralianSuper's private equity portfolio is expected to be $50 billion within five years.

"To help implement the fund's strategy, our US-based private equity team will grow to 20 members in the next few years, focused on strengthening relationships with well-aligned investment partners and sourcing compelling long-term investment opportunities," Charalambous said.

Charalambous said the fund had adopted a three-pronged investment approach: investing in general partner (GP) funds, investing alongside GPs in co-investment and co-underwriting opportunities.

"We have a strong focus on identifying best-in-class managers and working with them to build a relationship that will enable us to invest across all our strategies over the long term," Charalambous added.

"Not only do we bring a large pool of long-term capital, but we also have processes that align with the cadence of private equity transactions and can assess and act on opportunities very quickly."

AustralianSuper started co-underwriting in 2018 and has worked with preferred GPs to deploy $3 billion in co-underwrite transactions and co-investments over the past 18 months across 10 transactions globally.

The super fund will invest in a diversified portfolio, both by investment style and type, and sector.

The fund will work with leading GPs to source opportunities like management buyouts, growth equity financing and public to private transactions.