AustralianSuper increases private equity investment by $13 billion

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

About $9.5 billion of that capital is expected to be invested in the United States, where the fund targets a range of sectors, including healthcare, technology, industrials, consumer and financials.

AustralianSuper’s head of private equity, Terry Charalambous, said the fund would increase its allocation to private equity from 5% today to 7% by 2024. The move reflects AustralianSuper’s strategy to increase its investments in unlisted assets.

On increasing private equity investments, Charalambous said, “Not only can we move quickly and deploy large amounts of capital, but we can also add tremendous value to the process by leveraging industry expertise. depth of a 70-strong global listed equity firm with a capacity that manages more than $143 billion.”

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

“To help execute the fund’s strategy, our U.S.-based private equity team will grow to 20 members over the next few years, focused on building relationships with well-aligned investment partners and researching attractive long-term investment opportunities,” said Charalambous.

Charalambous said the fund has taken 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 the best managers and working with them to build a relationship that will allow us to invest in all of our long-term strategies,” added Charalambous.

“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 deals and can assess and act on opportunities very quickly.”

AustralianSuper began co-underwriting in 2018 and has worked with preferred GPs to roll out $3 billion in co-underwriting deals and co-investments over the past 18 months across 10 deals globally.

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

The fund will work with major GPs to find opportunities such as management buyouts, growth equity financing and public-private transactions.

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