{"id":100044,"date":"2025-08-27T16:25:10","date_gmt":"2025-08-27T16:25:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/100044\/"},"modified":"2025-08-27T16:25:10","modified_gmt":"2025-08-27T16:25:10","slug":"australias-biggest-pension-fund-to-add-10-more-private-equity-managers","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/100044\/","title":{"rendered":"Australia\u2019s biggest pension fund to add 10 more private equity managers"},"content":{"rendered":"

Unlock the Editor\u2019s Digest for free<\/p>\n

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/p>\n

Australia\u2019s largest pension fund plans to boost the number of private equity firms it partners with by 50 per cent over the next five years, as it bets on superior returns despite a wider slowdown in the sector.<\/p>\n

Mark Hargraves, head of international equities at AustralianSuper, which manages A$392bn ($254bn) of pension assets, told the Financial Times that he had already invested with three new private equity firms this year, and planned to add at least 10 more by the end of the decade. <\/p>\n

AustralianSuper currently invests with 21 private equity managers \u2014 also known as general partners (GPs) \u2014 and has started a search for more relationships with private equity firms after it said earlier this year that it would increase its allocation<\/a> to the asset class from 5 to 8 per cent.<\/p>\n

\u201cWe\u2019ve deliberately kept our number of relationships [with private equity managers] smaller because we really want to have strong relationships with GPs but as we scale, we\u2019re looking to grow it,\u201d said Hargraves.\u00a0\u00a0<\/p>\n

Private equity assets under management fell for the first time in decades last year<\/a> as buyout firms struggled to sell assets and return cash to investors, causing many pension and endowments funds to retrench from the sector.<\/p>\n

Hargraves said he was still \u201cconstructive\u201d on private equity because he believed it had among the highest returns on offer, and this would \u201cremain in place\u201d for many years.<\/p>\n

\u201cWe think there\u2019s still a number of opportunities that can be executed\u2009.\u2009.\u2009.\u2009but we also think you need to be selective because there\u2019s quite a lot of dry powder looking for new investments,\u201d he said.\u00a0\u00a0<\/p>\n

AustralianSuper started investing in private equity over 20 years ago but kept its allocation small partly due to the high fees charged by fund managers, who typically took a 2 per cent management fee and a 20 per cent share of profits, in a model known as \u201c2 and 20\u201d.<\/p>\n

In recent years, it has been able to reduce costs through so-called direct co-investments, which enable institutions to invest alongside GPs without incurring management or performance fees.\u00a0<\/p>\n

Over the past six years, AustralianSuper has expanded its private equity team from five people to close to 40, and it is aiming to increase it to between 45 and 50 \u201cin the next few years\u201d. <\/p>\n

AustralianSuper expects total assets to exceed A$500bn by 2030 while its private equity portfolio will probably rise from under A$20bn to \u201cA$35bn to A$40bn on a medium term view\u201d, Hargraves said.<\/p>\n

AustralianSuper\u2019s expansion into private equity comes as its assets are expected to grow rapidly after Australia increased the proportion of salaries that companies must pay into staff pensions to 12 per cent in July.<\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this…\n","protected":false},"author":2,"featured_media":100045,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[64,63,99,186,184,185],"class_list":{"0":"post-100044","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/100044","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=100044"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/100044\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/100045"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=100044"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=100044"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=100044"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}