AustralianSuper looks for more global private equity

AustralianSuper plans to double its allocation to private equity with a focus on New York.

AustralianSuper's head of private equity Terry Charalambous is relocating to New York to head up an expanded private equity team for the $260 billion fund as it looks for more global private equity opportunities. He answered some questions for Industry Moves before he left our shores.

Why are you increasing your overall allocation to private equity as a long-term strategy?

AustralianSuper is actively increasing its commitment to private markets, both in Australia and globally, to help the fund achieve sustainable long-term returns for our 2.6 million members.

AustralianSuper is an active investor that has the capacity to adjust asset allocations to changing conditions. We are targeting a Private Equity allocation of 7% in the medium-term with scope to increase it thereafter.

Given the size of AustralianSuper, is it becoming increasingly difficult to find opportunities in listed markets?

AustralianSuper is a global investor and as a result there will always be opportunities for the fund in listed markets. We will always have a strong commitment to listed markets.

Is it also difficult to find enough appropriately sized private-equity opportunities in the Australian market?

A major reason for the fund expanding our New York office is to find new opportunities.

The US is the biggest private equity market in the world by some margin, so it makes perfect sense that this would be the focus for AustralianSuper. To be able to access the market intelligence, partners and deals available in the US we need to be on the ground which is why we are in the process of hiring staff and expanding the New York office.

The fund already has an established presence in London, and we will look for opportunities in Europe as well.

What kind of opportunities are you looking for locally?

We are open to a wide range of opportunities, but healthcare, technology, industrials, consumer and financials are of particular interest.

These sectors align with our strategic approach - we believe these sectors are best placed to provide sustainable long-term returns through market cycles - and they also represent a large opportunity set.

Where do you think the opportunities are in this asset class and why? 

Healthcare, technology, industrials, consumer and financials are where we are focused, but not exclusively. We look for opportunities that can provide sustainable returns through market cycles, this aligns with our overall strategic approach.

What do you find most interesting about this asset class?

Private equity plays an important role in the Fund's overall diversified portfolio. It's a dynamic and interesting asset class that has the capacity to help businesses thrive while also delivering better risk adjusted returns for Fund members over the long term.