AustralianSuper has increased its stake in Origin Energy, describing its current share price as “substantially below” its long-term value estimation.
The $299 billion super fund raised its stake in the energy supplier by 1 per cent, expanding its total shareholding in the firm to 13.7 per cent.
“Origin’s current share price is substantially below our estimate of its long-term value and this is why we have increased our holding in the company,” an AustralianSuper spokesperson commented.
Shares in Origin have risen 70 per cent over the year to 25 September versus returns of 9 per cent by the ASX 200 over the same period.
The fund has remained a long-term shareholder in the energy provider. Prior to the recent announcement, AustralianSuper held more than 218 million shares in Origin as at 28 July 2023, or a stake of 12.7 per cent.
This made the fund Origin’s largest investor, compared to State Street and Vanguard that held 5.3 per cent and 5 per cent, respectively.
“Origin has a unique portfolio of market-leading energy assets and an advantaged position to capture value from the energy transition,” the spokesperson added.
According to the Australian Financial Review, AustralianSuper spent approximately $150 million on the additional 1 per cent stake.
AustralianSuper alongside HESTA recently came under fire for failing to divest from Woodside, Australia’s largest oil and gas company. Woodside has continued to sanction new oil and gas fields, most recently when it decided to proceed with its Trion oil development, a new deepwater oil field in the Gulf of Mexico.
Analysis by Market Forces revealed AustralianSuper is one of the top five shareholders in Woodside, increasing to 85 million shares in 2022 across all investment options.
“AustralianSuper has failed to use this increased leverage to demand an end to Woodside’s fossil fuel expansion plans,” Market Forces said.
In October 2022, HESTA dropped Origin from its watchlist of carbon-intensive companies, as the fund ‘welcomed’ Origin’s strategic shift away from upstream exploration permits.
However, a spokesperson from the fund told Super Review that it “will continue to engage with the company in order to understand how it plans to transition its operations to deliver long-term value in a low-carbon environment”.