AustralianSuper to invest $14 billion into private equity

AustralianSuper will invest $13 billion into private equity globally over the next two years, with $9.5 billion to go into a range of US 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% to 7% by 2024 as part of its strategy to increase exposure to unlisted assets.

Charalambous said: “We have a compelling offer. 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”.

AustralianSuper’s overall private equity investment would lift to $26 billion over the next two years and was expected to be $50 billion within five years.

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“To help implement the fund’s strategy, our U.S. 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.

“This is a really exciting time for the Fund as we continue to grow our world-class investment team, with high-calibre investment professionals attracted to our size, scale and purpose-driven culture.”

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 said.

“We have strong relationships with our GP partners who we work with strategically in co-investment and co-underwrite opportunities.

“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.

AustralianSuper would invest in a diversified portfolio, both by investment style and type, and sector.

‘The fund is working with leading GPs to source opportunities, including management buyouts, growth equity financing and public to private transactions,” Charalambous said.