Australia’s US$198 billion pension plans London spending spree
AUSTRALIA’S biggest pension fund plans to invest billions of pounds in the UK and Europe and is readying for a hiring spree in London.
The US$198 billion AustralianSuper fund, which has invested in Heathrow Airport and the redevelopment of King’s Cross, plans to manage around 25 per cent of its assets out of London by 2030, chief executive officer Paul Schroder said in an interview.
To support the expansion, the asset manager will increase headcount in London to about 180 in the next three years from about 83 today, Schroder said. Staff numbers are expected to swell to about 300 by 2030, he said.
The move is a boost to London after the Brexit vote damaged its international reputation and raised questions about its attractiveness as a financial centre. The hires will be across global equities, infrastructure, private credit as well as include several operational roles, Schroder added.
“The fund will be deploying a host of strategies in different asset classes globally,” he said. “We’re encouraged about the quality of talent that’s coming forward: it’s a sign of confidence in London as a financial city.”
The pension fund, which manages retirement savings for more than 3 million members and has had a London office for almost a decade, has invested in several UK and European assets in recent years.
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It currently manages more than £18.6 billion (S$31.8 billion) of assets invested in the UK and Europe, and the majority of that is managed out of London.
Australian and Canadian pension funds have become large investors in the UK in the past few decades as British pension funds have cut their holdings. According to a report on pension reforms by the Tony Blair Institute, a think tank, overseas pensions invest 16 times more in British venture capital and private equity than UK funds do.
The UK government is seeking to reverse that trend. Under reforms announced by Chancellor Jeremy Hunt last month, a group of large insurers agreed to invest 5 per cent of pension savings they manage in growth assets such as British startups.
Hunt also said consultations over other changes would spur UK pension funds to switch some of their holdings into equities from gilts, and to buy more infrastructure assets. BLOOMBERG
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