UniSuper makes first direct European infra investment for $670m
UniSuper has taken a 5% indirect stake in mobile towers firm Vantage Towers in an A$1 billion ($670 million) deal
This acquisition, facilitated by alternative asset manager KKR, is UniSuper's first direct unlisted infrastructure investment in Europe and is indicative of an extended focus on private markets.
“This is a high-quality defensive infrastructure investment with strong fundamentals and growth prospects,” Sandra Lee, head of private markets at UniSuper, said in a May 8 release.
Vantage Towers has a portfolio of over 83,000 mobile tower sites across 10 markets including Germany, Italy, Spain and UK.
Vantage Towers’ anchor tenant and major shareholder is Vodafone, Europe’s largest mobile network operator.
Vodafone recently entered into an agreement with a GIP and KKR-led consortium to invest in Vantage Towers.
UniSuper acquired its interest in Vantage by joining the consortium through its relationship with KKR.
“The expected significant growth in data demand underpins our interest in the digital infrastructure sector. At a time of economic uncertainty, we remain cautiously opportunistic, and this is a great example of that approach,” Lee said.
The investment adds to UniSuper’s approximately A$15 billion private markets portfolio.
UniSuper already has an infrastructure portfolio including Sydney, Adelaide and Brisbane Airports, Transurban Chesapeake, and a growing allocation to forestry assets.
UniSuper currently invests over A$115 billion on behalf of more than 620,000 members.
In November 2022, Vodafone entered into an agreement with a consortium to invest in Vantage Towers. The consortium is led by US asset management firms KKR and Global Infrastructure Partners (GLP), and UniSuper has acquired its interest in Vantage Towers by joining the consortium through its relationship with KKR.
According to the superannuation fund, the consortium partners and Vodafone plans to optimise and grow Vantage Towers business further, with Lee describing UniSuper’s role as “active long-term investors”.
Lee was appointed UniSuper’s head of private markets in July 2022 from the role of investment manager for infrastructure at the fund.
UniSuper announced In January 2023 it had expanded the fund’s private markets capabilities, stating that infrastructure and private equity investments “have been an increased investment focus for UniSuper over the past year”.
Also read: UniSuper awards private debt mandate as institutional interest soars
According to UniSuper’s annual report for the financial year 2022, infrastructure investments were then valued at almost A$8 billion, up 89% from A$4.2 billion the previous year.
LOWERING FOCUS FROM CHINA
In terms of general asset allocation strategy, Pearce said in January 2023 that UniSuper would not be rushing back into Chinese equities despite a rally at that time driven by foreign investors following the country’s dramatic exit from zero-Covid policies.
UniSuper would rather invest in other countries that will benefit from the reopening, including Australia.
“China to us is always going to be an emerging market,” Pearce said in an interview with Bloomberg.
“Like all these emerging markets, they’re going to go through spates where they’re putting on really sharp, large short-term rallies of like 20, 30%. You see this quite often in Latin American countries or eastern European countries.”