Australia's role in Asian portfolios poised to grow stronger
Australia's ambitions to position itself as an important regional player in renewable energy and critical minerals is set to attract more institutional investors from the Asia Pacific interested in sustainable investments, according to the investment manager of the Queensland Government.
“Australia's role in the Asia-Pacific region has matured. It now plays a key role in investors' portfolios due to our dominance in renewable energy, contribution to critical minerals, innovation in emerging technologies, strong regulatory support, and its position as a mature market with great transparency and governance," Kylie Rampa, CEO of QIC, told AsianInvestor.
QIC has intensified its efforts to attract Asian investments, marked by the opening of a Singapore office last December.
QIC
"We already have highly regarded institutional investors from Asia on our platform, and we're working hard to increase that number. In our discussions with Asian investors, we highlight the scale of opportunities in Australia, particularly in energy transition," said Rampa.
As Australia positions itself as a renewable energy superpower, the investment landscape is ripe with opportunity.
"It's estimated that Australia alone will need $1.9 trillion to reach net zero by 2050. This presents a massive opportunity for capital deployment, requiring both foreign private investment and government support," she said.
The federal government is supporting this transition through various initiatives like the Powering Australia plan, the Capacity Investment Scheme, Rewiring the Nation, and Safeguard Mechanism reform, she noted.
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DOUBLE DUTY
QIC, managing A$111 billion ($73.1 billion) in assets, operates in a distinctive capacity within Australia's investment landscape, operating as both a limited partner (LP) and a general partner (GP).
“Currently, 55% of our assets comes from our stakeholder, the Queensland Government, and different government funds — and 45% comes from private institutional clients,” Rampa said.
"We're both a GP and an LP, wearing a sovereign investing hat while also working closely with private clients around key themes," she said.
This dual role enables QIC to navigate the complex waters of government mandates and private sector opportunities. This evolution has been carefully balanced, with QIC maintaining its governmental ties while asserting its independence.
The investment manager has a substantial renewable energy portfolio.
"We have an A$7 billion portfolio of energy transition assets in Australia and New Zealand, and A$12 billion globally," Rampa said, noting that QIC has invested in Australia's leading renewable energy platform, Tilt Renewables, which owns 11 solar and wind assets and has a deep pipeline.
NATIONAL PRIORITIES
QIC's investment strategies closely align with Australia's national priorities.
"We understand that Australia's prosperity and security are intimately linked with those of our neighbours’. Australia has much to offer the region through trade and investment and can play a key role in maximising benefits for both Australia and our neighbours," Rampa said.
The Queensland Critical Minerals and Battery Technology Fund exemplifies this approach.
"The Queensland Critical Minerals and Battery Technology Fund, which we manage on behalf of the Queensland government, allows us to build capability and track record in this important sector before it becomes more broadly investable from an institutional perspective," said Rampa.
The firm is also focusing on assets that build resilient communities while delivering returns.
"We're looking at both the supply and demand sides of energy," Rampa said.
Recent acquisitions include Vector Metering (now Blue Current), one of Australia's largest smart metering businesses, and Pacific Energy, a low-cost provider of off-grid power solutions for the mining sector.
In climate technology, QIC has invested in Endua, an energy company that creates hydrogen power banks.
"The proactive approach from both state and federal governments, coupled with the regulatory framework and investment, increases the attractiveness of investment from major institutional investors into the region, which is beneficial for Queensland and the whole region,” added Rampa.