AustralianSuper talks overseas expansion plans

New private investments for the A$130bn superannuation fund are expected to be debt rather than equity-based and more likely to be offshore rather than domestic in the near term.

AustralianSuper, along with other superannuation funds, is expanding its real estate mandate globally.

Last month, the Melbourne-based superannuation fund named Damian Moloney as head of investments for Europe. Based out of the fund’s five-person London office, the former chief executive of Frontier Advisors will oversee investments across asset classes in Europe. At the end of March, the fund also appointed TH Real Estate to advise on office and retail investments in continental Europe. The firm has been managing UK retail investments on behalf of the fund since 2013.

AustralianSuper, which oversees A$130 billion ($97.4 billion; €81.5 billion), including A$10 billion in property, is not the only Australian superannuation fund targeting Europe. A new joint venture platform between IFM Investors and Industry Super Property Trust will also invest in real estate investments in the region, PERE reported last week.

PERE spoke with Jason Peasley, the fund’s head of mid-risk portfolios, about AustralianSuper’s global ambitions, capital flexibility and attractive European opportunities.


PERE: What are the fund’s plans for investing in international real estate?

Jason Peasley, head of mid-risk portfolios

Jason Peasley: AustralianSuper is seeking to expand the property portfolio throughout Europe over the long term.  It underlines our commitment in pursuit of our strategy to acquire core assets in major international markets with trusted and experienced local partners. There are no specific quantifiable objectives in terms of increasing the amount we invest in any specific region.

The fund has developed a mid-risk assets team so as to bring property, infrastructure and direct lending capabilities into one group. The unlisted asset sector can now be effectively managed as one portfolio, which enables us to take a broader and relative view across a consistent return spectrum to look for the most attractive investment opportunities for our members.

We are also looking at subordinated debt in infrastructure in Australia, North America and Europe and have expanded this into property as well. The fund cannot only invest across asset classes but also across capital structures, leveraging the flexible nature of our capital.

PERE: What looks attractive for European real estate investments?

JP: We will continue to focus on large-scale retail, office and mixed-use opportunities in major European markets. We look for opportunities based on the needs of the entire fund portfolio.

PERE: How is the fund thinking about debt compared with equity investments?

JP: New investment activity within the broader unlisted portfolio in the near term is expected to be debt rather than equity-based and the focus is more likely to be offshore rather than domestic. That said, as a long-term investor in these assets classes, AustralianSuper is always on the lookout for good investment opportunities, as evidenced by our activity during the past two to three years.

PERE: How will Moloney’s role support growth in Europe?

JP: We have specialists in infrastructure, property and debt in London who are actively managing our investments as well as looking for future opportunities. With Damian’s appointment, we have the building blocks to grow our London platform sustainably and support the fund’s expected investment appetite going forward.