Aware Super looks to leverage on-ground overseas presence

Eyeing lucrative opportunities in property, infrastructure, and private equity, Aware Super’s London office will be fully operational by year’s end, with the possibility of a North American office in coming years.

According to Damien Webb, head of international and deputy chief investment officer at the $160 billion fund, an on-ground presence in the UK will help the fund leverage its existing networks and investment partnerships towards further prospects.

This would initially be across property, infrastructure, and private equity, with a focus on direct investments, he told Super Review.

“We’ve gradually increased our exposure to unlisted assets over the past 10 years or so as we’ve grown into one of Australia’s biggest industry super funds, actively targeting the sectors we believe are best placed to outperform in the longer term,” Webb said.

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“As we keep growing, we expect to continue modestly increasing our exposure to unlisted assets to help in delivering strong long-term returns for our 1.1 million members, with a focus across property, infrastructure, private equity and credit over the next few years.”

The fund expects to reach about $250 billion by 2025–26. 

Recently, JP Morgan’s 2023 Future of Superannuation report, which collated data from six superannuation fund leaders in Australia and the UK, said unlisted assets have been a “significant driver” of super funds’ long-term outperformance.

Weighing in, Webb said Australia is “a relatively small pool of capital.”

He explained: “The superannuation system as a whole totals $3.5 trillion, which is 150 per cent of the Australian stock market. As a result, what we’re finding across asset classes is the need for global diversification; with this demand driving our recent strategy to expand our global footprint offshore, starting with the opening of a London office in late 2023.”

The executive is expected to be boots on the ground himself towards the end of 2023 as Aware Super builds up an initial UK team of some 14 staff, a combination of local hires and staff from Australia.

“We expect we’ll have 30–40 staff at the office within the next few years,” he added. 

According to Webb, Aware Super selected the UK for its first overseas base as it’s one of the world’s most important developed capital markets. 

“We’ll certainly be looking at investment opportunities in the UK, and indeed across Europe and elsewhere,” he told Super Review.

“In coming years we’ll be examining the case for opening a North American office. It’s too early to suggest specifically where such an office could be.”

Fellow mega fund AustralianSuper, the country’s largest super fund, opened its office in London in 2016 and currently has some $40 billion invested in the UK and Europe. The $300 billion fund is forecast to grow to over $500 billion over the next five years and has signalled it will deploy almost 70 per cent of its growing inflows into global markets.

AustralianSuper recently announced a number of senior hires to bolster its operations in the UK and enhance its offshore investment capabilities, including JP Morgan veteran, John Normand, to lead investment strategy and former BNP Paribas executive, William Manfield, as head of group risk, international.