(Bloomberg) — AustralianSuper is increasing its allocation to unlisted assets as the country’s biggest pension fund works to finalize four private equity deals by the end of the year, according to the firm’s investment chief.
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“We are looking to put on four new private equity managers over this calendar year period and it looks like that is well in train,” Mark Delaney said in an interview on Thursday. “The team know these managers from working previously with them and they have really good long-term track records in straight-down-the-line, conventional, private equity.”
Delaney didn’t specify details of the arrangements or names of the fund managers.
The deals follow a build-out of AustralianSuper’s New York office that now has around 60 people who are partly tasked with developing relationships with private markets fund managers. Delaney held meetings with private equity firms on two trips to New York this year, he said.
“Capital raising is very low and generally investing in vintages when raising is low is the best strategy for private equity, so we think it’s a more attractive asset class,” Delaney said.
AustralianSuper said in May the private equity allocation of its balanced investment option could grow to 8% from 5%.
The move comes after a challenging period for the pension’s listed equity portfolio as returns were skewed to a handful of companies including the Magnificent Seven group of mega-cap tech firms. The dynamic “has not suited our style of portfolio,” but performance may improve over time given the fund’s “long-term diversification,” across asset classes, he said.
Australia’s giant pensions have weathered heightened volatility through the year as President Donald Trump’s trade agenda and pockets of global conflict have rocked global markets. US stocks initially tumbled after Trump’s ‘Liberation Day’ tariff announcement but have since reversed declines and on Wednesday set a fresh all-time high.
Delaney, who oversees the fund’s more than A$365 billion ($240 billion) in assets, said while US tariffs would likely slow growth in the economy and corporate profits, that does not warrant a reduced exposure to equities.
“There is a strong consensus that tariffs will cause a meaningful slowdown in the US economy but no recession,” Delaney said. “We don’t think it’s enough for us to go underweight stocks.”
