AustralianSuper hunts for private equity deals across Asia

[MELBOURNE] AustralianSuper, the country’s largest pension fund, is hunting private equity (PE) deals in Asia to grow its private markets portfolio, according to chief executive officer Paul Schroder.

The A$410 billion (S$364 billion) fund has yet to unveil a precise allocation target, but intends to deploy significant sums across the region in an effort to expand its private markets holdings, which stood at A$85 billion as at Jun 30 last year.

“We are diversifying and thinking about Asia, especially through the PE lens,” Schroder said on Thursday (Feb 5). “We are just at the beginning of our plan to expand our PE exposures in Asia.”

The pivot to Asia would place the region as a key area of growth for the fund’s private equity allocation, which currently represents around 4 per cent of its overall portfolio, but may increase to 10 per cent as the fund grows, Schroder said.

Plans to beef up its private markets exposure in the region follow a run of new deals with external fund managers in the US and Europe. Last year, Mark Delaney, the fund’s outgoing chief investment officer, told Bloomberg that it was finalising four new commitments with external private equity fund managers. The pension fund currently has 5.1 per cent of its balanced portfolio invested in private equity.

The fund’s approach is based on working with top-performing external fund managers for deals that can include co-investments, and “we are now thinking about expanding it into Asia”, Schroder said.

“I don’t want to foreshadow exactly what we will be doing and where, but I think it’s more likely that those opportunities will exist in those strong, more developed nation economies where we’ve already got existing connections,” Schroder said.

AustralianSuper’s expected boost to private equity also comes amid a recent run of underperformance. AustralianSuper’s default option gained 9.5 per cent for the year to June, 2025, lagging the industry average 10.5 per cent return, according to data from Chant West, which tracks the sector.

Delaney has previously indicated underweight holdings of mega-cap US tech stocks in externally managed active equity portfolios may be partly to blame. The pension, among others, cut exposure to the Magnificent Seven in the first half of last year, before the group of US tech stocks rallied to new highs.

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“It hasn’t really been the time for active investors in this last little period,” Schroder said, “but as earnings become less concentrated and as opportunities emerge and as markets correct, there’ll be plenty of opportunities for active managers like us.”

Unlisted markets have become a central column of AustralianSuper’s portfolio. The pension’s decision to open offices in London in 2016 and New York in 2021 was partly made with the goal of developing tighter links with private markets fund managers in Europe and the US. AustralianSuper also has an office in Beijing that its website states focuses on research.

AustralianSuper is also hunting a new CIO after announcing in December that Delaney would step down in June. The pension has hired executive search firm Spencer Stuart for the recruitment. BLOOMBERG