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High returns gained from European property
Superannuation funds could boost their returns by investing in European property, according to LGIAsuper.
LGIAsuper said it held an 11% share in real estate manager Europa Capital’s Parisian Semaphore investment. The office building was sold year ahead of business plans for $230 million and was forecast to generate an internal rate of return of 33%, with 50% extra capital created from the original 2017 investment.
The fund also had an 11% share in the real estate manager’s Copenhagen residential building which sold for $102 million, which would generate a return of 48% when completed in 2023.
LGIAsuper chief executive, Kate Farrar, said both properties were great examples of our partners’ value-add approach to asset investment.
“As a boutique super fund our point of difference is that we are able to pursue profitable mid-market investments because we can react quickly to opportunities in ways that big funds may not,” Farrar said.
“It’s why we appeal to members who want confidence that their fund’s investment strategy is going to protect them from market fluctuations and take advantage of all available opportunities.”
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The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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