AustralianSuper building out investment capabilities

AustralianSuper is systematically building out its in-house investment capabilities and has appointed a global head of infrastructure based in Sydney in a newly created role.

The superannuation fund, which has $38 billion in assets under management, has hired Jason Peasley from Artisan Investment Managers, an independent boutique adviser for infrastructure investors and operators.

He is set to start work on April 14 and will report to Mark Delaney, the fund’s chief investment officer.

AustralianSuper has over $5 billion in infrastructure assets and is aiming to grow investments in this area “significantly” over the next few years, says Delaney.

It has a target of doubling overall AUM to $75 billion within 10 years, supported by an average net new cashflow of $2.5 billion to $3 billion per year. The fund is a beneficiary of the government’s policy of enforcing workers in Australia to put 9% of their gross wages into superannuation.

“We have an expectation that the size of the fund will continue to grow fairly rapidly over the next five-to-10 years, and that will facilitate us building out into new investments,” Delaney tells AsianInvestor.

“We are trying to build our investment capabilities in equities and asset allocation, and infrastructure is a material part of our portfolio. As our assets grow we will buy more infrastructure.”

Almost 50% of the fund’s infrastructure investments are based in Australia, with the rest spread across the globe, including the US, UK, Germany, Chile and Poland.

As a rule, AustralianSuper invests in projects on a scale of national importance through funds in a multi-manager approach, although it also makes direct investments.

“Infrastructure is pretty much a bottom-up investment strategy and we do it on a deal-by-deal basis,” explains Delaney. “So we try and find the most attractive opportunities and invest in those. We are looking for solid, long-term returns from good, stable businesses.”

Peasley will be responsible for infrastructure investments in Australia and across the world. He has over 16 years of experience in the industry, working across infrastructure acquisition, finance and investment management in Australia, Europe and the US.

“In terms of over-viewing our [infrastructure] portfolio and what the managers are doing, having someone like Jason with deep experience across a range of different infrastructure assets will help us to work more effectively with our managers,” says Delaney.

Before Artisan IM, Peasley worked as director and head of transactions for Hastings Fund Management and director of infrastructure at Deutsche Bank.

Overall, AustralianSuper has $13 billion invested in Australian equities, $7.7 billion in international equities, $4.5 billion in property, $1.5 billion in private equity and the rest in bonds and cash.

Delaney confirms the fund has exposure to equities in Japan, but adds that its overall portfolio was underweight Japanese equities before the earthquake and tsunami which struck the island nation on March 11.

“We use a multi-manager approach for global equities and we have not heard anything from our mangers that indicates they have substantially changed the current position of the portfolio," he says. "We were underweight Japanese equities anyway.”