CFS’ Kelly Power has described the US as an “open door” for attractive investment opportunities amid super funds’ growing interest in the offshore market.
Colonial First State’s (CFS) superannuation fund plans to increase its US exposure, building on its current $28 billion investment in US assets, the fund’s CEO told Bloomberg TV last week.
Following a superannuation delegation’s meetings with Trump officials in the US, which InvestorDaily understands CFS was invited to attend but declined to, Power emphasised the strong appeal of US investment opportunities.
“It’s patient capital, it’s long-term capital. We’re a very sophisticated market from an investment perspective and it’s sort of an open door when you go to the US in terms of people looking for investment opportunities,” she told Bloomberg TV.
“In our fund, it’s about $28 billion invested with the US and we’re increasing that all the time through our partnerships and moving into new asset classes as well.”
Power noted that equities, particularly in the US market, play a significant role in the fund’s strategy due to the market’s size.
“Obviously equities is a big portion of it – 75 per cent of global equities sits in the US so it’s a big part of our allocation. But we are increasingly looking at infrastructure, we’re looking at private equity and other asset classes, and really just responding to opportunities to get the best outcome for our members,” she explained.
Power emphasised that CFS doesn’t focus on a specific geographic tilt but instead responds to opportunities as they arise, regardless of location.
“There’s a lot of money going into unlisted assets, that’s not just a US theme, that’s globally. A lot going into private equity, a lot going into private credit, and a lot going into infrastructure. We’re looking at all those opportunities,” the CEO said.
She stressed the importance of external partners, at a time when most funds are moving towards internalisation. Namely, over the past decade, big funds have shifted from relying on external managers to enhancing internal capabilities, promising lower fees to members, with AustralianSuper and other mega funds like HESTA and UniSuper increasing their direct investment holdings.
“For us we really look through partnerships. We’ve got a partnership with BlackRock for example and we look for local teams that are onshore to help us deploy the capital,” Power said.
On private capital in particular, she noted its diversification appeal. Acknowledging also the corporate regulator’s recent crackdown on private markets in its new paper, Power again emphasised the importance of having “the right partners” with the “right track record”.
“For us, looking at making sure that we’re not concentrated with too many partners, making sure that we don’t have concentration around too many specific types of loans or investments is important,” she said.
“From ASIC’s perspective, they’re looking more sort of systemically at the whole system. I think their report did say that it’s not a concern at the moment, but obviously it’s a growing asset class.”
